Wednesday December 12, 2018
Home Business Rupee at its ...

Rupee at its two-year low as Sensex goes south

0
//
Republish
Reprint

New Delhi: Bombay Stock Exchange (BSE) Sensex was trading at 25,663 down 223 points whereas NSE Nifty was at 7,799, down 65 points at 9:45 AM declining over 200 points as Nifty fell lower than the 7,800 level.

BSE Mid-cap Index is trading down at 0.55% – 10,990, however BSE Small-cap Index is trading down at 0.54% – 11,569.

All BSE sectors are showing impuissance.

The Indian rupee opened up poorer by 30 paise at 66.91/$ in early trade on Friday. On the domestic front, Nikkei/Markit India Services Purchasing Managers’ Index (PMI) the assessment showed that India’s services productiveness clamber throughout November as companies continued to be negative about commercial predictions.

Services PMI index fell severely to 50.1 from October’s level of 53.2. Adding to the dip, market retained on the reoccurrence of the opinion of a US Fed rate hike. The Fed Forward rate turns are now hinting at a 79 percent possibility of 25 basis points moved rates.

The Sensex drop off affected the Indian rupee to a two-year low of 66.99 against the dollar. The Reserve Bank Governor Raghuram Rajan is aimed at fighting the crunch-like situation.

The plan for the improvement is chalked out on the basis of these points.

The latest feebleness of rupee has occurred due to external reasons, in specific, because of the expected rise of US Federal Reserve rates for the first time in the last 10 years.

The betterment of euro currencies has also affected the rupee as it is closely tracked by India.

Trading pressure on the Indian market is as well contributing to the stress as the sectoral indices on the BSE trading is negative. Some of the important service providers have seen a low of 1 percent and 1.5 percent, specifically the Tata Consultancy (TCS), ICIC Bank and Infosys.

One of the recent obstruction is caused by the floods in Chennai as most Indian IT companies have 10-30 percent workplace based there.

Also, the S&P 500 suffered its biggest dip since late September on December 4 due to the dissatisfied performance of European Central Bank for greater stimulus.

Click here for reuse options!
Copyright 2015 NewsGram

Next Story

Fate of Indian equity market in the hands of upcoming Budget Session

0

Mumbai: The upcoming week in the Indian equity market will witness Parliamentary proceedings, US macro-economic data and trends in crude oil prices, leading the fate of markets’ next moves.

Even the budgetary announcements, rupee’s trajectory and the interest of foreign investors will give vital cues to where the market is heading.

“Markets would continue to be lacklustre and news driven. Forthcoming budget expectations and corporate earnings would be watched closely,” predicted Devendra Nevgi, chief executive of ZyFin Advisors.

Pankaj Sharma, head of equities for Equirus Securities, elaborated that investors will be guided and influenced by developments surrounding the union budget.

“The market would read the important cues on the budget from key decision makers, both politicians and senior bureaucrats and react accordingly,” Sharma noted.

“One good thing in all this market mayhem over last 6-7 weeks which has been led by global factors is that the usual buzz on the budget has largely been missing.”

Vaibhav Agarwal, vice president and research head at Angel Broking, pointed out that investors have not priced in the possibility of key reforms being passed in the parliament session.

“Any progress towards implementation of important reforms such as the GST (goods and services tax) would be a key trigger for the markets,” Agarwal told reporters.

Market participants expect the central government to increase expenditure, announce tax concessions and pave the way to reduce the NPAs levels of the banking sector.

“Sentiments are currently down and any positive announcement is surely going to trigger a relief rally in the equity markets. This rally might spill over to the currency markets,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told reporters.

According to Banerjee, normal parliamentary proceedings, after the recent political turmoil will be keenly followed by market participants. The parliament’s budget session will commence on Tuesday.

“Any signs of a washout in the initial few days will dampen sentiments and dent the rupee,” Banerjee stated.

He explained that an “over-valued rupee” will come under pressure from February 22 onwards as a string of US economic data released till date is expected to keep the dollar well supported.

The rupee had crashed to an all time low at 68.89 to the dollar in the oversees currency markets on Friday and ended the day’s trade at 68.72.

Domestically, the rupee had closed unchanged from its previous close of 68.47 to a greenback on Thursday. The domestic currency markets were closed on Friday.

Besides, the union budget economic survey and railway budget will dictate trend on the bellwether indices informed Gaurav Jain, the director of Hem Securities.

“Indices may seem to remain volatile with a positive bias ahead of the expiry of February series derivative contract, economic survey and reform measures announced in the upcoming railway budget in the week ahead,” Jain said.

In addition, global cues, such as crude oil prices and the trends in foreign funds inflows will be keenly observed.

“Markets will continue to react to global cues with US home sales and GDP data expected next week,” Agarwal added.

Analysts forecast the continuation of the relief rally at the Indian bellwether indices. Short-covering, value buying and positive global cues had swelled the equity markets, during the just-concluded weekly trade.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) zoomed by 723.03 points or 3.14 percent to 23,709.15 points during the just concluded week.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) rose by 229.8 points or 3.29 percent to 7,210.75 points.

Global indices too rose with the Dow Jones Industrial Average closing the week with gains of 2.6 percent. London’s FTSE rose by 4.2 percent during the week under review. (Rohit Vaid, IANS)