The rupee today closed higher at 71.15 to a dollar

The rupee today closed higher at 71.15 to a dollar

16 Aug 2019 05:34 PM

Financial Market Overview

16th Aug, 2019

Evening Coffee

MARKETS AT CLOSE                                    

Indian Rupee

  • The Indian rupee fell for a sixth week against the dollar, its biggest losing streak since May last year, as trade tensions and global growth concerns kept investors away from risk assets.
  • However, the rupee today closed higher at 71.15 to a dollar, against 71.27 at previous close. The local unit opened at 71.36, but rose to day’s high of 71.05 on dollar sales by foreign banks, likely for exporters. The unit declined 0.5% this week, adding to the 3.4% fall over the last five weeks.
  • The pair is now headline-dependent and on off-days when there is some positive chatter on the trade war, one can see some appreciation.

Indian Equities

  • Benchmark indices reversed morning losses to close marginally higher with the Nifty decisively holding 11,000 level, backed by banks and auto stocks. The BSE Sensex rose 38.80 points to 37,350.33 and the Nifty50 gained 18.40 points at 11,047.80.
  • However, for the week, indices lost more than half a percent. Reliance Industries's (RIL) long-term local-currency Issuer Default Rating (IDR) to positive from stable and has affirmed the rating at 'BBB'. At the same time, it has affirmed the long-term foreign-currency IDR at 'BBB-' with a stable outlook, as RIL's foreign-currency IDR is capped by India's (BBB-/Stable) country ceiling of 'BBB-', the agency added. Fitch said the outlook on the local-currency IDR was revised to positive due to the potential for RIL to further deleverage.

Global Markets

  • European markets are broadly higher today with shares in Germany leading the region. The DAX is up 1.05% while France's CAC 40 is up 1.03% and London's FTSE 100 is up 0.56%.
  • The S&P 500 and the Dow gained ground in a late rally on Thursday as upbeat retail sales data offset recessionary fears amid the simmering U.S.-China trade tensions. Wall Street zig-zagged from red to black and back much of the day as investors juggled mixed messages of a strong consumer and dropping U.S. Treasury yields. The Nasdaq closed lower, weighed by a plunge in the shares of Cisco Systems Inc. The Dow Jones Industrial Average rose 99.97 points, or 0.39%, to 25,579.39, the S&P 500 gained 7 points, or 0.25%, to 2,847.6, and the Nasdaq Composite dropped 7.32 points, or 0.09%, to 7,766.62.
  • U.S. retail sales surged in July as consumers bought a range of goods even as they cut back on motor vehicle purchases, helping to assuage financial market fears that the economy was heading into recession.The upbeat report from the Commerce Department on Thursday, however, will likely not change expectations that the Federal Reserve will cut interest rates again next month as news from the manufacturing sector remains dour, underscoring the darkening outlook for the economy against the backdrop of trade tensions and slowing growth overseas.
  • U.S. 30-year Treasury yields fell to a record low below 2% and benchmark 10-year notes dropped to a three-year trough on Thursday amid persistent worries about global trade tensions and economic slowdowns around the world. A day after inverting, the U.S. yield curve steepened a little. Curve inversion, which occurs when long-term yields dip below short-term ones, is widely considered a warning that the economy is headed for recession.