Jan 16 2019

Rupee Slips As Fiscal Risks Dent Appetite For Local Bonds

Financial Market Overview

16th January, 2019

Noon update

Indian Rupee:-

  • The Indian rupee erased early gains to fall sharply against the dollar in afternoon trade, tracking a decline in government bonds on concerns that likely pre-election spending may lead the nation to deviate from its fiscal consolidation path.
  • The rupee changed hands at 71.14 to a dollar, against 71.0350 at previous close. The currency opened at 71.06 before rising to 70.94 in early trade. It fell to the day’s low of 71.2325 to dollar, but recouped some losses after at least one state-run bank and two private lenders sold the greenback, apparently on behalf of the Reserve Bank of India.

 Indian Equities:-

  • Indian shares rose with energy and financial stocks accounting for nearly half the gains in the index amid expectations that Reliance Industries Ltd will report a good set of numbers for the quarter ended December.
  • The broader NSE index was up 0.17% to 10,905.35 while the benchmark BSE index was up 0.16% at 36,375.45.

 Global Markets:-

  • Asian markets finished mixed as of the most recent closing prices. The Hang Seng gained 0.27%, while Japan’s Nikkei 225 was off 0.55%. Shares in China were unchanged with the Shanghai Composite at 2,570.42.
  • European markets are also mixed today. The CAC 40 is up 0.37% while London’s FTSE 100 is down 0.24% and Germany’s DAX is up 0.17%.
  • The benchmark Brent crude reversed losses and was last trading 015% higher at $60.73 per barrel after an overnight gain of 2.8%.
  • Meanwhile, the dollar index was down 0.1% at 95.90 after closing 0.4% yesterday to near two-week high amid a slide in the euro, after Germany’s economic growth last year came at the slowest in five years. It was last trading 0.1% lower.
  • The U.K. had a choppy session yesterday after the British Parliament rejected Prime Minister Theresa May’s Brexit plan. The pound was last trading little changed at 1.2875 against the dollar. As per media reports, May has to submit another proposal for the Brexit deal as the deadline of Mar. 29 for Britain to leave the European Union draws closer.