Financial Market Overview
31st January, 2019
- The Indian rupee remained higher in afternoon trade but off highs after rising to an over two-week high against the dollar in early trade, after the Federal Reserve said it will be patient on further rate increases and hinted at a likely end to its monetary policy tightening drive. Investors now await India’s fiscal deficit estimates for this and the next fiscal years in the interim federal budget, due to be announced tomorrow.
- The rupee changed hands at 71.07 to a dollar, against 71.1175 at the previous close. The currency opened at 70.95 and extended gains to 70.8650 per dollar, its highest since Jan. 15.
- Indian shares rose on Thursday, in line with broader Asian markets as a dovish stance by the U.S. Federal Reserve boosted sentiment, while gains in ICICI Bank Ltd lifted both indexes after the lender posted an improvement in asset quality.
- The broader NSE index was up 1.06% at 10,764.40, while the benchmark BSE index was up 1.22% to 36,026.41.
- Asian markets finished broadly higher today as of the most recent closing prices. The Hang Seng gained 1.07%, while the Shanghai Composite and Nikkei 225 rose 0.35% and 1.06% respectively.
- European markets are also higher today. The CAC 40 is up 0.40%, London’s FTSE 100 is up 0.49% and Germany’s DAX is up 0.70% while Spain’s IBEX35 is up 0.34%.
- The benchmark Brent crude oil contract was headed for its third straight session of gains today, helped by higher risk appetite and tighter supply. It was last trading 0.50% higher at $61.96 per barrel.
- The dollar index slipped to over three-week low yesterday and was last trading down 0.1% at 95.25, after the Fed said the central bank will be patient on any future rate adjustments amid recent global economic and financial developments and muted inflation pressures.
- Meanwhile, Activity in China’s vast manufacturing sector shrank for the second straight month in January, pointing to further strains on the economy that could heighten risks to global growth.
- Investors now await outcome of high-level trade talks between officials of U.S. and China that started in Washington yesterday.