Mar 14 2018

USDINR above 65.00 after RBI LoU ban

Financial Market Overview

14th March, 2018

Morning Coffee:-                                                                                  

MARKETS AT OPEN:-

Rupee:-

  • Rupee lower after RBI bars banks from issuing Letters of Undertakings. Pair USDINR now at 65.04 against 64.88 at open and 64.89 previous close.
  • India’s central bank last night discontinued the practice of lenders issuing Letter of Undertakings and Letters of Comfort with immediate effect, it will increase costs for importers. The directions by the Reserve Bank of India came after jeweler Nirav Modi perpetrated a $2 billion fraud using fake LoU’s of Punjab National Bank. RBI said in the notification that banks could continue to issue letters of credit and bank guarantees.
  • Pair to tip in range between 64.90-65.30.

Indian Equities:-

  • Benchmark indices started off the day on a negative note on Wednesday, continuing consolidation for second consecutive session. Weak global cues weighed on market sentiment.
  • The 30-share BSE Sensex was down 99.50 points at 33,757.28 and the 50-share NSE Nifty fell 37.60 points to 10,389.30.

Global Markets:-

  • The 30-share BSE Sensex was down 99.50 points at 33,757.28 and the 50-share NSE Nifty fell 37.60 points to 10,389.30.
  • European markets finished broadly lower today with shares in Germany leading the region. The DAX is down 1.59% while London’s FTSE 100 is off 1.05% and France’s CAC 40 is lower by 0.64%.
  • Wall Street’s major indexes fell on Tuesday as the dismissal of Secretary of State Rex Tillerson and the possibility of additional tariffs dragged down stocks across sectors. The Dow Jones Industrial Average fell 171.99 points, or 0.68 percent, to 25,006.62, the S&P 500 lost 17.73 points, or 0.64 percent, to 2,765.29 and the Nasdaq Composite dropped 77.31 points, or 1.02 percent, to 7,511.01.
  • The dollar index fell by the most in a week on Tuesday after February U.S. inflation data came in line with expectations and as President Donald Trump abruptly fired Secretary of State Rex Tillerson.
  • The U.S. CPI rose by 0.2% month-on-month in February as compared with the 0.5% increase in previous month. The core CPI increased 0.2%, down from the 0.3% pace in January. The data suggested that the Federal Reserve could stick with its projections of three interest rate increases this year.