Rupee Stays Up As Clarification On FPI Surcharge Expected

Rupee Stays Up As Clarification On FPI Surcharge Expected

23 Aug 2019 01:37 PM

Financial Market Overview 

23rd August, 2019 

Afternoon Update 

Indian Rupee

  • The Indian rupee stayed higher against the dollar in afternoon trade on foreign banks’ dollar sales and rebound in shares, as the government is expected to issue a clarification on the foreign portfolio tax surcharge issue.
  • The rupee was trading at 71.73 to a dollar against 71.81 at previous close. The local unit opened at 71.92 and briefly declined to a year-to-date low of 72.0350, tracking weakness in the Chinese yuan and local shares, before rising to the day’s high of 71.67.

Indian Equities

  • Indian equities rebounded from a sharp fall on Friday, following a media report that the government could soon announce a rollback of higher taxes for foreign portfolio investors (FPIs).
  • The broader NSE index was up 0.35% at 10,778.45, while the benchmark BSE index was up 0.16% at 36,530.88.

Global Markets

  • Asian markets remained subdued, with uncertainty over how much further the U.S. Federal Reserve would cut rates added to caution caused by global growth fears. The Hang Seng gained 0.65% and the Shanghai Composite rose 0.49%. The Nikkei 225 gained 0.40%.
  • European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.60% while Germany's DAX is up 0.38% and France's CAC 40 is up 0.33%.
  • The benchmark Brent crude oil contract was last trading up 0.3% at $60.12 per barrel.
  • Asian currencies traded higher and gains were led by the Korean won. The rebound in regional currencies came after a pullback in the dollar index yesterday. The dollar index fell 0.2% yesterday to come off three-week highs. It was last trading little changed at 98.25.
  • The dollar’s losses against Asian currencies came ahead of the release of the U.S. Federal Reserve’s July meeting, due later in the day, and Fed Chair Jerome Powell’s speech at a central bank symposium at Jackson Hole on Aug. 23. His speech is expected to provide cues on the outlook for future rate cuts.