Oct 06 2018

Rupee posted its biggest weekly fall in 7 weeks

Weekly Synopsis

Date:- 06th October 2018

Markets from 01st October 2018 to 05th October 2018:- 

Indian Rupee:-

  • The Indian rupee tumbled to a fresh record low on Friday at 74.23, after MPC left policy rates unchanged to disappoint markets. The rupee posted its biggest weekly fall in seven weeks on a sustained jump in oil prices and elevated U.S. yields. For the week, the rupee fell 1.77%. The rupee closed on Friday at 73.7650 against the previous weekly close of 72.48 on Sep 28th, 2018 to a greenback. It trades in a weekly range between 74.23 to 72.60 against the greenback.
  • India’s foreign exchange reserves fell to $400.53 billion as of Sept 28, compared with $401.79 billion a week earlier, the Reserve Bank of India said on Friday.
  • The RBI’s monetary policy committee (MPC) left the repo rate at 6.50 percent, though 35 out of 64 analysts survey last week had forecast a rate hike. The MPC also held the reverse repo rate at 6.25 percent. The panel however, shifted its policy stance to ‘calibrated tightening” from ‘neutral’.

Global Market:- 

  • The U.S. dollar weakened on Friday after data for September showed jobs gains that fell short of expectations while wages increases slowed on an annualized basis during the month, easing concerns about a large run-up in inflation.
  • Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, though data for July and August was revised to show 87,000 more jobs added than previously reported. Average hourly earnings increased eight cents, or 0.3 percent, in September after rising 0.3 percent in the prior month.
  • The dollar reversed direction several times before settling at lower levels after the data. The dollar index fell as low as 95.516, from around 95.770 before the data, before rising back to 95.678.
  • The U.S. trade deficit increased to a six-month high in August. The Commerce Department said on Friday the trade gap increased 6.4 percent to$53.2 billion, widening for a third straight month.
  • Activity in the U.S. service sector accelerated to a 21-year high in September, according to a report released on Wednesday. The Institute for Supply Management said its index of non-manufacturing activity rose to 61.6 from 58.5 in August. It was the highest reading since Aug. 1997.
  • Activity in the UK service sector slowed slightly but remained solid last month. Research firm Markit said its services purchasing managers’ index fell to 53.9 in September compared to forecasts for a reading of 54.0. The prior month’s reading was 54.3.
  • Activity in the UK construction sector slowed to its weakest output in six months in September. Research firm Markit said its construction purchasing managers’ index fell to 52.1 in September, compared to forecasts for a reading of 52.8.
  • Crude oil markets notched their fourth-straight weekly gain for their longest winning streak since May. U.S. crude’s West Texas Intermediate (WTI) crude settled a penny higher at $74.34 a barrel and London-traded Brent crude, the benchmark for oil prices outside the U.S., was down 0.58%, or 49 cents, at $84.09.
  • European markets finished broadly lower on Friday with shares in London leading the region. The FTSE 100 closed down 1.35% while Germany’s DAX was off 1.08% and France’s CAC 40 ended lower by 0.95%.
  • US. stocks were lower after the close on Friday. The Dow Jones Industrial Average fell 180.43 points, or 0.68 percent, to 26,447.05, the S&P 500 lost 16.04 points, or 0.55 percent, to 2,885.57. The Nasdaq Composite dropped 91.06 points, or 1.16 percent, to 7,788.45, marking its worst weekly percentage decline since march.

Local Market:-

  • Indian shares plunged on Friday, dragged by energy and financial stocks. The benchmark BSE index closed down 2.25 percent at 34,376.99, its biggest percentage loss since February 2. The broader NSE index ended 2.67 percent lower at 10,316.45, its biggest percentage fall since Nov. 11, 2016. For the week, the NSE index fell 5.62 percent, while BSE index shed 5.11 percent, their sharpest drop since the week ending Feb. 12, 2016.
  • Reliance Industries Ltd closed 6.5 percent lower, contributing to over half the NSE index’s losses, while Housing Development Finance Corp Ltd closed 3.92 percent weaker. Shares of oil marketing companies such as Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd closed 23.97 percent and 19.89 percent lower, respectively. Indian Oil Corp Ltd shares fell 15.86 percent.