DAILY MARKET COMMENTARY. 20 th November, 2014

Transcription

1 DAILY MARKET COMMENTARY 20 th November, 2014

2 Domestic and International Highlights Indian rupee opened at after closing the previous session at levels. The intra-day range is seen between levels. OECD raises India growth outlook to 6.6% for FY The Paris based think tank, Organisation for Economic Cooperation and Development (OECD) has forecasted that the Asia's third-largest economy would grow by 6.6% in 2015/16, up from its last forecast of 5.7% growth in May and the growth would further edge higher to 6.8% in The revised numbers have come in as the economy is giving signs of a turnaround and imbalances have lessened. The OECD tracks its 34 advanced economy members, in addition to issuing forecasts and surveys of large non-member countries like India. Govt. Planning to fund Thermal and Hydro Power plants Indian govt is now planning to infuse fresh capital into the fund crunch hit Thermal and Hydro Power plants. The current plan is giving a financial package worth INR 6 lakh crore in plants that would produce about 130,000 mw power These include lenders providing additional debt to distressed projects without the condition of bringing fresh equity from the developers, lowering interest rates, restructuring loans without classifying them as non-performing assets and extending the project construction period and loan repayment period to match cash flows of the projects. The power plants are facing challenges like gas and coal shortage, delay in obtaining regulatory clearances, low offtake by distribution companies, transmission bottlenecks, high interest rates and rupee depreciation. Oil prices fall as FED uncertain over US economy Oil prices fell for a third straight day on Wednesday, as early gains on talk of a possible OPEC output cut vanished after the Federal Reserve released minutes of last month's policy meeting revealing worries that U.S. inflation could remain below target for "quite some time.". U.S. crude finished down 3 cents at $74.61, after a session high at $75.40, while the Brent Crude fell by 37 cents to close at %78.10 a barrel. Indian bond yields closed at 8.16% as against the previous level of 8.15%. The US 10 year treasury yield is trading at 2.34% against the previous levels of 2.32%. Trend: A current upswing in the USDINR pair has breached the resistance at and a close above the same can see the pair towards levels. Outlook Exporters are suggested to cover close to levels. (They are suggested to discuss their positions with their respective RM's). Importers are suggested to cover on dips close to and lower levels. (They are suggested to discuss their positions with their respective RM's). Short term range (7-15 days): Medium term range (3-6 months):

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

4 USDINR: Daily Chart USDINR has an immediate moving average support at levels and the trend line support at levels. The pair has broken the key resistance at levels, and a consistent close above the same will took the pair to levels. Source: Bloomberg

5 EUR/USD The Euro weakened against the US dollar despite dovish Fed meeting minutes, as markets seek that interest rates are set to rise next year. Today, German and Euro Zone PMI services are expected to release. GBP/USD The GBP/USD posted modest gains against the US dollar after BoE minutes, which maintained QE and interest rate levels. Today, UK will release its Retail Sales number which is expected to come at 0.4% against the previous levels of -0.3%.. AUD/USD The Australian dollar traded weaker against the US dollar after US Federal Reserve meeting minutes and due to further falls in the price of iron ore,, Australia s largest export commodity. USD/JPY The U.S. dollar escalated past the 118 yen sentiment mark after minutes from meeting of the Federal Open Market Committee (FOMC) reaffirmed that the central bank intends to hike rates toward the end of Yen has lost more than 30% of its value against the US dollar since 2012.

6 Gold The gold prices continued to fall in second straight session as a poll showed weaker support among Swiss voters for a referendum that would force the central bank to boost its gold reserves. The precious metal fell around 1.5% in last two trading sessions. Crude Oil The crude oil prices continued to fall in third straight session, after the release of weekly inventory data from the US economy. The crude oil inventory in the US rose by 206M against the expected fall of 0.7M. Dollar index The US dollar index, which is trading near its four year high levels, showed little change to the FOMC meeting minutes released. The FED members raised the concerns regarding the low inflation in the US economy.. Economic Calendar Date Description Actual Forecast Previous Nov 20 Thu HSBC Flash Manufacturing PMI Nov 20 Thu German Flash Manufacturing PMI Nov 21 Fri FOMC Member Mester Speaks Nov 21 Fri ECB President Draghi Speaks - - -

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