The rupee settled higher today at 71.02 to a dollar

The rupee settled higher today at 71.02 to a dollar

11 Oct 2019 05:29 PM

Financial Market Overview

Indian Rupee

  • The Indian rupee logged its second weekly decline against the dollar, due to a sharp uptick in crude oil prices, but hopes of a long-awaited Sino-U.S. trade deal put a lid on losses.
  • The rupee settled higher today at 71.02 to a dollar, against 71.07 at previous close. The local unit rose to a one-week high of 70.80 in opening trade, before declining to 71.03 intraday. The unit fell 0.2% this week, adding to last week's 0.5% decline.
  • A turnaround in rupee’s depreciative trend can only happen if it settles above 70.20 in coming days, which seems less likely due to ongoing concerns over global growth and risk appetite. Traders will continue to eye how trade talks unfold today.

Indian Equities

  • Indian shares closed higher on Friday as optimism over U.S.-China trade negotiations whetted investor appetite for riskier assets. Software services company Infosys Ltd reported a slight dip in its September-quarter results. Rival Tata Consultancy Services had kicked off India's corporate earnings season on Thursday, and in the quarter ended September company profits were expected to be muted, given a slowdown in the domestic economy.
  • The broader NSE index ended 0.63% higher at 11,305.05, while the benchmark BSE index closed up 0.65% at 38,127.08. Both indexes closed 1.2% firmer on-week. Metal and information-technology sectors led gains in both indexes.

Global Markets

  • European markets are broadly higher today with shares in Germany leading the region. The DAX is up 1.83% while France's CAC 40 is up 1.10% and London's FTSE 100 is up 0.13%.
  • U.S. stocks rose on Thursday on hopes that top-level U.S.-China trade talks would yield at least a partial deal, while a jump in Apple's shares also boosted the market. Top U.S. and Chinese negotiators met on Thursday for the first time since late July to try to find a way out of a 15-month trade war. The Dow Jones Industrial Average rose 150.66 points, or 0.57%, to 26,496.67, the S&P 500 gained 18.73 points, or 0.64%, to 2,938.13 and the Nasdaq Composite added 47.04 points, or 0.6%, to 7,950.78.
  • U.S. consumer prices were unchanged in September and underlying inflation retreated, supporting expectations the Federal Reserve will cut interest rates in October for the third time this year amid risks to the economy from trade tensions. A strong labor market could, however, complicate matters for the Fed amid divisions among officials on the appropriate response to the rising headwinds to growth. Layoffs remain low even as companies are becoming hesitant to hire more workers because of a slowing economy. The unemployment rate is near a 50-year low of 3.5%.
  • China's exports likely fell at a slightly faster pace in September as softening global demand and U.S. tariffs bit more deeply, while imports shrank for a fifth straight month, suggesting pressure on the economy is increasing. More U.S. tariff measures against China are set to take effect on Oct. 15 and Dec. 15, unless the two sides can agree on to de-escalate their protracted trade war in negotiations in Washington this week.