Dollar remains subdued ahead of New Year holidays
时间:2024-06-26 12:55:56 阅读(143)
Rupee rose sharply following suspected dollar inflow and lower trade deficit number in November. Data showed deficit narrowed $20.58 billion in November as compared to $31.46 billion in the previous month.
This fiscal, India’s merchandise exports stood at $278.80 billion, down 6.51% annually, while merchandise imports stood at $445.15 billion, down 8.67% annually. For the week, the rupee traded in a narrow range and volatility remained in check following active RBI intervention. Latest data released from the RBI showed forex reserves rose to the highest level in 20-months to $615.9 billion.
Another Fed member pushed back expectations of upcoming cuts in borrowing costs. Weakness extended after the core PCE index grew at 2.6% (YoY) in November compared to 2.9% in the previous month.
This week, on the domestic front, no major data is expected to be released and global factors will continue to remain in focus. From the US, pending sales and Chicago PMI number to gauge a view for the dollar.
We expect the USDINR(Spot) to trade sideways and quote in the range of 82.00 and 82.50. As far as the dollar index is concerned we expect it to trade with a negative bias and quote in the range of 100.50 and 102.50.
Last week, it was the Japanese Yen that was in focus ahead of the bank of Japan policy statement. The Japanese Yen was in focus after the BoJ maintained ultra-loose policy settings in a widely expected move.
The BOJ governor said prices and wages appeared to be moving in the right direction with labour unions and big firms signalling the chance of sustained wage gains next year. The central bank also left unchanged a pledge to ramp up stimulus “without hesitation” if needed.
(Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)
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- ack of strong growth and continued high inflation in US is a cause for concern for equity markets, given the gap between bond yields and earnings yields for the US market.”
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.
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