DAILY MARKET COMMENTARY. 08 th May, 2015

Transcription

1 DAILY MARKET COMMENTARY 08 th May, 2015

2 Domestic and International Highlights Indian rupee opened at after closing the previous session at levels. The intra-day range is seen between levels. Sterling Pound shoots above , as Conservatives eye majority in polls The British Pound skyrocket by almost 250 pips from yesterday, piercing through the crucial resistance of after exit polls showed that Conservatives are expected to gain majority. The Conservatives are seen winning 316 seats out of the total 650 parliamentary seats. Although, this does not constitute a majority, the exit poll predictions are much better than previous polls. Also it would better the 302 seats that the Conservatives held in the previous parliament. FIEO: Government to Review FTP Incentives for Exports The Federation of Indian Export Organisations (FIEO) has asked the government to review the incentives announced in the Foreign Trade Policy. The incentives given to exports sector are less than 1% of the country's total exports. Under different schemes, the government has provided incentives worth Rs 17, crore in India's exports dipped deeper in the negative zone recording a decline of 21% in March, the biggest fall in the last six years. FIIs turn to China as they exit Indian markets So far as foreign institutional investment (FIIs) flows into India are concerned, the tide seems to have turned of late. FIIs, which had so far in 2015 been investing in the Indian equity market, have sold Rs 3,467 crore worth of equities in May. In the past fortnight, they have offloaded stocks worth Rs 13,110 crore. The benchmark indices, the BSE Sensex and the National Stock Exchange's Nifty have tumbled 9% each during this period. FIIs are now looking at China as an alternative investment destination in the Asian region. Going ahead, the FIIs will continue to buy stocks where they feel the fundamentals remain solid and where they see value. Indian bond yield is trading at 7.92% as against the previous level of 7.87%. The US 10 year treasury yield is trading at 2.24% from the previous level of 2.19%. Outlook Outlook Trend: The USD/INR pair has broken the crucial resistance of It has taken resistance yesterday at levels and inching down. Only and only if breaks again it can go till levels otherwise we can see a retracement till levels. Exporters are advised to hold with a stop loss of only for long term. (They are suggested to discuss their positions with their respective advisors). Importers are advised to cover on major dips around for near term. (They are suggested to discuss their positions with their respective advisors). Short term range (7-15 days): Medium term range (3-6 months):

3 Key Indices Benchmark Indices Closing Change % Change Sensex Asian Currencies Singaporean Dollar Value (US $) % Change Nifty Hang Seng Korean Won Philippines Peso Nikkei Indonesian Rupiah Dow Jones Nasdaq Dax Indian Rupee Chinese Yuan Malaysian Ringgit Thailand Baht FII Flows in India Debt ($ mn) Equity ($ mn) st Apr April month Year so far Source: Bloomberg

4 USDINR Daily Chart The USD/INR pair has broken the crucial resistance of It has taken resistance yesterday at levels and inching down. Only and only if breaks again it can go till levels otherwise we can see a retracement till levels. Source: Bloomberg

5 EUR/USD The EUR/USD pair weakened against the U.S dollar after better than expected Jobless claims data. The data is seen as a precursor to the more important Non-farm payroll data. EUR/USD weakened as the bond sell-off eased and carry trade became attractive again. The pair has a crucial support at level going forward. GBP/USD The GBP/USD pair rallied against the US dollar after the exit polls showed Conservatives reaching out for a clear majority in the recently concluded election. GBP/USD is expected to be volatile today as elections results pour in from Britain. Clear majority for either party is likely to push GBP/USD higher, whereas a hung parliament could see GBP/USD dropping. AUD/USD The AUD/USD fell from yesterday s highs post the release of RBA monetary statement. The Australian Central Bank lowered the growth outlook and raised the unemployment forecasts and said that it is willing to adjust policy if needed as business spending remained low amid Chinese economic concerns. Chinese import fell by 16%, hurting the Australian economy. USD/JPY USD/JPY remained little changed following the release of in line with expectations US factory orders data. US factory orders rose 2.1% in March, just above the 2.0% expected by analysts and after a revised 0.1% decline in the prior month. USD/JPY was immune to data and continued to trade at the zone, virtually unchanged on the day.

6 Gold Gold prices corrected for three consecutive days and are trading near the crucial support of $1180. The gold price continued lower in trading while the dollar pared some of its earlier losses and investors remained sidelined ahead of tomorrow s US jobs report. Crude Oil Crude Oil futures settled back under $60 a barrel, with traders increasingly worried about how much oil Iran can add to the global market should sanctions be lifted as part of a deal with world powers over its nuclear program. Technically, prices have given a rising wedge breakdown with a Evening Star pattern suggesting bearishness. Dollar index The dollar index rallied after taking support at 94 levels after the release of better than expected unemployment claims data. US weekly jobless claims of 265,000 came better than the forecast 277,000. Dollar Index will take further cues from the Non farm payroll data that will be released later during the day. Economic Calendar Date 5-May-Tue 5-May-Tue 6-May-Wed 6-May-Wed 6-May-Wed 7-May-Thu 8-May-Fri 8-May-Fri 9-May-Sat Description GBP Construction PMI USD Trade Balance AUD Retail Sales GBP Services PMI ADP Non-Farm Employment Change GBP Parliamentary Elections USD Non-Farm Employment Change USD Unemployment Rate CNY CPI

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