Financial Market Overview
19th November, 2018
- The Indian rupee rose for a fifth straight session to end at 71.64 highest since Sep. 4, against the dollar, versus 71.92/71.93 at previous close, tracking weakness in the greenback amid dovish comments from Federal Reserve officials and upbeat local shares that boosted hopes of foreign fund inflows.
- The 10-year benchmark bond snapped two-day fall to end higher at 95.98 rupees and 7.79% yield, versus 95.83 rupees and 7.82% yield at previous close, tracking gains in the local currency, even as investors awaited the outcome of the central bank’s board meeting.
- Indian shares pared most of their early gains to trade marginally higher on Monday, as the central bank held a board meet to discuss several issues related to liquidity, lending rules for banks and handing over surplus reserves to the government. This is the first meeting to be held since the extent of a deep rift between the RBI and the government became public. The broader NSE index was up 0.26 percent at 10,710.45, while the benchmark BSE index edged up 0.35 percent to 35,581.42.
- Indian government is pressing the Reserve Bank of India (RBI) for easing of lending and capital rules for banks, providing more money to non-banking financiers, financing support for small businesses and giving the government greater access to surplus reserves the RBI has built.
- European markets are mixed today. The FTSE 100 is up 0.33% while the DAX gains 0.03%. The CAC 40 is even.
- Wall Street had firmed on Friday after U.S. President Donald Trump said that he might not impose more tariffs on Chinese goods after Beijing sent a list of measures it was willing to take to resolve trade tensions. The comment stoked speculation of a deal when Trump meets Chinese President Xi Jinping on the sidelines of a G20 summit in Argentina this month.
- Home prices in some smaller Chinese cities could fall next year as the world’s second-largest economy slows, Fitch Ratings said on Monday, while adding the government is expected to step in to stem any precipitous decline. Sales volumes may fall up to 10 percent, following low-single-digit gains in 2018, with declines likely to be the strongest in lower-tier cities.
- The dollar followed to hover at 96.416 against a basket of currencies, down from a peak of 97.693. The euro was parked at $1.1417, while the dollar backed off to 112.72 yen. Sterling edged higher to $1.2854 after political turmoil over Brexit caused steep losses last week.
- The government’s finalised gross domestic product (GDP) was forecast to rise 4.2 percent in July-September from the quarter earlier on a seasonally adjusted and annualized basis, the poll of 11 economists showed, below the 4.7 percent rise seen in the advanced estimate but still much stronger that the 1.2 percent growth clocked in the second quarter. On a year-on-year basis, third quarter GDP growth was forecast at 2.4 percent, slightly below the 2.6 percent advanced estimates and lower than the second quarter’s 4.1 percent rise. It also marked the third successive quarter of softer annual growth.