Financial Market Overview
23rd January, 2019
- The Indian rupee rose for the first time in four sessions against the dollar, tracking gains in most Asian currencies amid drop in crude oil prices on subdued risk appetite.
- The rupee settled at 71.34 to a dollar, against 71.44 at previous close. The currency opened at 71.17 and extended gains to 71.14, before falling to the day’s low of 71.37.
- The movement in crude prices is interconnected to risk appetite, so while drop in oil prices in positive for the rupee, reducing risk appetite is equally adding pressure, and vice-versa. Bunched-up dollar inflows after U.S. re-opened yesterday also supported the currency.
- Bears took over D-Street in the last hour as a sharp selloff among majority of sectors weighed on benchmarks. The Sensex closed with cuts of over 330 points, while the Nifty ended below 10,850-mark. At the close of market hours.
- The Sensex was down 336.17 points or 0.92% at 36108.47, and the Nifty down 91.30 points or 0.84% at 10831.50. The market breadth was negative as 1069 shares advanced, against a decline of 1,453 shares, while 138 shares were unchanged.
- Sun Pharma and Yes Bank were the top gainers, while ITC, M&M and Grasim lost the most.
- European markets are mixed. The CAC 40 is higher by 0.13%, while the FTSE 100 is leading the DAX lower. They are down 0.30% and 0.16% respectively.
- British factories faded badly over the last three months, especially around the outlook for exports in a slowing global economy and ahead of Brexit, an industry survey showed on Wednesday. The Confederation of British Industry’s (CBI) quarterly gauge of manufacturing expectations fell to -23 in the three months to January from -16 in the period to October, its lowest level since July 2016.
- U.S. home sales tumbled to their lowest level in three years in December and house price increases slowed sharply, suggesting a further loss of momentum in the housing market. The weak report from the National Association of Realtors (NAR) on Tuesday was the latest indication of slowing economic growth. The consumer sentiment dropped in January to its lowest level since President Donald Trump was elected more than two years ago.
- German economic sentiment improved unexpectedly in January, but an index of current conditions tumbled to a four-year low, underlining concerns over the health of the euro zone’s largest economy. The index of German economic sentiment rose to -15.0 points this month from a reading of -17.5 in December. However, the Current Conditions Index dropped to 27.6 from 45.3.
- The dollar index was last trading was trading little changed. Some safe-haven bets reduced after Bank of Japan kept interest rates unchanged and cited caution on global economic growth. The monetary policy meeting of European Central Bank is due tomorrow.