Dec 05 2018

Rupee Steady As MPC Outcome Meets Expectation

Financial Market Overview

05th December, 2018

Evening Coffee                                                                        

Indian Rupee:-

  • The Indian rupee was little changed against the dollar, as outcome of the monetary policy committee’s interest rate decision was on expected lines, even as investors awaited oil exporting group OPEC’s meet tomorrow. The rupee settled at 70.46 to a dollar, against 70.49 at close yesterday. It opened lower at 70.64 and extended decline to 70.74, before briefly rising to the day’s high of 70.38 post the MPC policy decision.
  • The RBI policy was largely status quo and the commentary were good enough to boost the bonds, but the local unit was within its intra-day range and now the focus is back to the global cues.

 Indian Equities:-

  • It’s a negative close for the market for second consecutive session as investors reacted to the stance on interest rates by the Reserve Bank of India.
  • The Monetary Policy Committee (MPC) kept interest rates unchanged, but sharply cut the inflation targets for October-March At the close of market hours, the Sensex was down 249.90 points or 0.69% at 35884.41, while the Nifty was lower by 80.20 points or 0.74% at 10789.30. The market breadth was negative as 799 shares advanced, against a decline of 1,744 shares, while 145 shares were unchanged.

 Global Markets:-

  • European markets are lower today with shares in Germany off the most. The DAX is down 0.80% while France’s CAC 40 is off 0.91% and London’s FTSE 100 is lower by -1.04%.
  • Wall Street tumbled more than 3 percent on Tuesday, led lower by bank and industrial shares, as the U.S. bond market sent unsettling signs about economic growth and investors worried anew about global trade.The Dow Jones Industrial Average fell 784.99 points, or 3.04 percent, to 25,041.44, the S&P 500 lost 89.65 points, or 3.21 percent, to 2,700.72 and the Nasdaq Composite dropped 283.09 points, or 3.8 percent, to 7,158.43
  • European Central Bank policymakers are debating ways to wean the euro zone off years of easy money, floating ideas such as a new kind of multi-year loans and staggered increases in interest rates. The ECB will have a difficult task over the next couple of years: dialling back its unprecedented stimulus without hurting a banking sector still deeply divided along national lines.
  • U.S. investment bank J.P. Morgan said on Wednesday the chances of Britain calling off its divorce from the European Union had increased after a string of humiliating parliamentary defeats for Prime Minister Theresa May cast new doubt over her plan to quit the bloc and sent sterling higher.
  • Britain’s pro-Brexit trade minister Liam Fox also said it was now possible that Brexit would not happen. There was a real danger that parliament would try to “steal” Brexit from the British people, Fox told a parliamentary committee on Wednesday.