Financial Market Overview
24th December, 2018
- The Indian rupee was little changed against the dollar in choppy trade, as month-end greenback demand from importers and weak local shares amid uncertainty around U.S. political issues offset early gains from exporters’ dollar sales.
- The rupee ended at 70.14 to a dollar against 70.15 at the previous close. The currency opened lower in early trade, before turning higher and falling again. It moved in a 69.88-70.30 band. Most Asian currencies ended mixed against the dollar.
- The U.S. Republicans and the Democrats could not reconcile their differences on funding over the Mexico wall, leading to the U.S. Congress missing a deadline for passing a spending bill. Trump’s budget director and chief of staff said yesterday that the partial government shutdown could continue into January.
- The bear run continued on D-Street, signalling a possible halt to this Santa rally. The Nifty has ended below 10,700, while the Sensex closed with cuts of nearly 300 points. At the close of market hours, the Sensex was down 271.92 points or 0.76% at 35470.15, while the Nifty was lower by 90.50 points or 0.84% at 10663.50.
- The market breadth was negative as 908 shares advanced, against a decline of 1,638 shares, while 142 shares were unchanged.
- Wipro and TCS were the top gainers, while Hero MotoCorp, Bajaj Auto, and JSW Steel lost the most. The market will be shut on Tuesday on account of Christmas.
- European markets are lower today as French and British shares fall. The French CAC 40 is off 1.18% while the London FTSE 100 is down 0.57%. The German DAX is trading positive at +0.21% World stocks were set for their seventh straight day of losses on Monday, as investors nervy about the possibility of a prolonged U.S. government shutdown and a worsening global economy opted for the safety of bonds and gold.
- Wall Street stocks fell sharply in volatile trading on Friday, with the Nasdaq confirming it is in a bear market, as concerns of slowing economic growth led investors to flee stocks in high-valuation sectors such as technology and communication services. The Dow Jones Industrial Average fell 416.09 points, or 1.82 percent, to 22,443.51, the S&P 500 lost 50.8 points, or 2.06 percent, to 2,416.62 and the Nasdaq Composite dropped 195.41 points, or 2.99 percent, to 6,333.00.
- U.S. President Donald Trump’s Treasury secretary called top U.S. bankers on Sunday amid an ongoing rout on Wall Street and made plans to convene a group of officials known as the “Plunge Protection Team.
- The political uncertainty has only added to the air of risk aversion, punishing equities to the benefit of bonds. Ten-year Treasury yields were near their lowest since August at 2.789 percent having fallen over 40 basis points in just six weeks. The gap between two- and 10-year yields has shrunk to only 14 basis points, a flattening of the curve that has sometimes heralded economic turning points in the past.
- Regarding the risk posed to financial markets should Britain leave the European Union without a negotiated framework, Boujnah said Euronext took the risk seriously.