The rupee ended higher against its previous close

The rupee ended higher against its previous close

19 Jul 2019 05:33 PM

Financial Market Overview

19th July, 2019

Evening Coffee

MARKETS AT CLOSE                                    

Indian Rupee

  • The Indian rupee logged its second weekly drop against the dollar amid foreign fund outflows from local assets and as renewed trade tensions between the U.S. and China dented investor appetite. The rupee ended higher at 68.8025 to a dollar today, against 68.95 at previous close. The local unit opened at 68.75 and briefly rose to the day’s high of 68.72 before declining to the day’s low of 68.95. The rupee fell 0.2% for the week, adding to last week’s fall of 0.4%.
  • Focus is now on FOMC member James Bullard’s speech and any comments that will increase chance of 50 bps rate cut more than the 25 bps, will lead to inflow into the domestic market. However, we expect most part of any large inflows will be absorbed on buying by state-run lenders that will keep local unit’s movement confined in a tight range.

Indian Equities

  • The S&P BSE Sensex plunged more than 550 points while Nifty50 broke below 11,500 levels on July 19.
  • On the sectoral front, the S&P BSE Auto index led the fall, followed by Realty, Bankex, and consumer discretionary stocks. Sectors which bucked the trend include power and consumer durables. Foreign portfolio investors (FPis) should consider the option of structuring themselves as companies rather than trusts to avoid paying the increased surcharge announced in Budget 2019, Finance Minister Nirmala Sitharaman said, in a discussion on the Finance Bill in the Parliament on July 18.

Global Markets

  • European markets are lower today with shares in France off the most. The CAC 40 is down 0.22% while London's FTSE 100 is off 0.16% and Germany's DAX is lower by 0.02%.
  • U.S. stocks moved higher on Thursday after a slow start as comments from New York Fed President John Williams helped cement expectations for an interest rate cut from the U.S. central bank at the end of the month. Williams said that when rates and inflation are low, policymakers cannot afford to keep their "powder dry" and wait for potential economic problems to materialize. The Dow Jones Industrial Average rose 3.12 points, or 0.01%, to 27,222.97, the S&P 500 gained 10.69 points, or 0.36%, to 2,995.11 and the Nasdaq Composite added 22.04 points, or 0.27%, to 8,207.24.
  • The number of Americans filing applications for unemployment benefits increased moderately last week, pointing to still strong labor market conditions despite signs that economic activity was slowing. Other data on Thursday showed factory activity in the mid-Atlantic region rebounded sharply in July, reaching its highest level in a year. That added to recent surveys on manufacturing that have suggested the struggling sector was stabilizing.The improvement in the regional factory surveys likely reflects a decision by President Donald Trump not to impose tariffs on Mexican goods after the two countries struck a deal on immigration. But manufacturing, which makes up about 12% of the economy.
  • British retail sales rebounded unexpectedly in June, according to official data that may raise hope the economy will sidestep a downturn in the second quarter. Monthly retail sales volumes jumped 1.0%, the Office for National Statistics said, well above all forecasts in economists that had pointed to a 0.3% drop. Compared with June 2018, sales were up by 3.8%, again stronger than all forecasts.



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