Feb 27 2019

Rupee Slumps As India-Pakistan Tensions Rise; RBI Steps In

Financial Market Overview

27th February, 2019

Noon update

Indian Rupee:-

  • The Indian rupee extended losses to over one-week low against the dollar in afternoon trade, dragged down by fresh border tensions between India and Pakistan. However, likely intervention by the central bank recouped some losses.
  • The rupee changed hands at 71.30 to a dollar, against 71.0625 at previous close. The currency rose to 70.9450 earlier today tracking broad weakness in the dollar, before falling to day’s low of 71.48, its lowest since Feb. 18.

Indian Equities:-

  • Indian shares retreated in midday trade after Pakistan said it shot down two Indian jets on Wednesday, escalating conflict between the two nuclear-armed neighbours, a day after Indian warplanes struck inside Pakistan.
  • The broader NSE Nifty fell by 0.8% to 10,751.20 after rising as much as 0.96% earlier in the day and was last down 0.35% at 10,797.35, while the benchmark BSE Sensex declined by 0.7% to 35,735.330, after gaining up to 1.1% and was last down 0.24% at 35,886.23.

Global Markets:-

  • Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.50% and the Shanghai Composite rose 0.42%. The Hang Seng lost 0.05%.
  • European markets are lower today with shares in London off the most. The FTSE 100 is down 0.44% while Germany’s DAX is off 0.33% and France’s CAC 40 is lower by 0.25%.
  • The benchmark crude oil prices reversed early losses yesterday and closed 0.7% higher, as the Organization of the Petroleum Exporting Countries seemed to stick to its supply cuts despite pressure from U.S. President Donald Trump. It was last trading 0.38% higher at $65.46 per barrel.
  • The dollar index slipped 0.4% yesterday and closed at a three-week low amid comments by the Federal Reserve Chair Jerome Powell that a patient policy approach was warranted despite robust U.S. growth.
  • Weaker-than-expected U.S. housing starts data that declined 11.2% in December also weighed on the index. Meanwhile, U.S. consumer confidence improved in February, data released by The Conference Board showed. The index was last trading 0.1% higher at 96.13.