Oct 05 2018

Rupee tumbles as RBI surprises by leaving policy rate unchanged

Financial Market Overview

05th October, 2018

Evening Coffee:-                                                                                  

MARKETS AT CLOSE:-

Rupee:-

  • The Indian rupee tumbled to a fresh record low to end at 73.7650 versus 73.5750 at previous close, after MPC left rates unchanged to disappoint markets, which had factored in a rate hike of 25 basis points. India’s foreign exchange reserves fell to $400.53 billion as of Sept 28, compared with $401.79 billion a week earlier, the Reserve Bank of India said on Friday.
  • The RBI’s monetary policy committee (MPC) left the repo rate at 6.50 percent, though 35 out of 64 analysts surveyed last week had forecast a rate hike. The MPC also held the reverse repo rate at 6.25 percent. The panel however, shifted its policy stance to ‘calibrated tightening” from ‘neutral’.

Indian Equities:-

  • Indian shares plunged on Friday, dragged by energy and financial stocks, after the central bank in a surprise decision kept key interest rates unchanged while the government’s announcement on Thursday to cut gasoline and diesel prices hurt oil marketers.
  • The benchmark BSE index closed down 2.25 percent at 34,376.99, its biggest percentage loss since February 2. The broader NSE index ended 2.67 percent lower at 10,316.45, its biggest percentage fall since Nov. 11, 2016.

Global Markets:-

  • European markets are lower today. The Germany’s DAX is down 0.69%, the London’s FTSE 100 is off 0.66%, the Spain’s IBEX35 fell 0.46%, the Eurozone’s STOXX50 is lower by 0.33% the France CAC is off 0.32% and the SMI is trading lower by 0.26%.
  • German industrial orders rebounded in August. Contracts for German goods rose by 2.0 percent after a fall of 0.9 percent in the previous month, the ministry said on Friday. A poll of analysts had predicted a rise of 0.5 percent in August.
  • The dollar edged toward a six-week high on Friday before monthly U.S. jobs data. The dollar index, which measures its performance against a basket of six currencies, was 0.1 percent higher on the day at 95.907, closing in on a six-week high of 96.121.