Market Highlights & Commentary:
- INR open stronger at 71.69 against yesterdays close of 72.01 and may trade the day mixed between 71.50-71.85/90 under two way price action.
- India’s retail inflation for Nov’18 stood at 2.33% (Refer graph below) against Oct’18 of 3.33% falling for 5th starlight month, well below RBI’s med term target of 4%.
- Food inflation declined at at faster pace of 2.61% from previous 0.86%, while fuel and light inflation stood at 7.39% down from 8.55 %. Housing and clothing inflation saw a marginal fall of 5.9% and 3.53%.
- With latest inflationary reading, RBI in its upcoming meeting may consider changing its stand from calibrated to neutral. Tom is Rbi board meeting and it may take steps to ease liquidity and relax norms for PAC banks.
India’s industrial production on other hand rose to 11 month high at 8.1% in Oct’18 (Refer graph 2 below) from previous of 4.5%. Mining output rose to 7% while manufacturing and Electricity generation stood at 7.9% & 10.8%
- From overseas markets, UK PM May Theresa survives a No-confidence vote from her party. The eurosceptic critics from her own party had triggered a no confidence vote in her leadership after she postponed the parliamentary vote on Monday. GBP rallied post to the news from 20 month low against USD.
- USD traded weaker against most of its rival currencies including GBP and EUR on back of soft inflation report. The headline consumer inflation slowed to 2.2% in Nov’18 from 2.5% in Oct’18 on back of falling fuel price.
- Market will now focus its attention to tomorrows events- India’s latest trade deficit No. and RBI meeting.
Technical Corner & strategy for the day:
- USDINR may be currently seeing a retracement, if price continues to hold above 71.50-71.60 levels, possibility of breaking above 72 still on the table.
- GBPINR currently around 90.40 levels and looks to be mixed below 91. If price breaks below 90 levels, possibility of 88.80-89.00 levels in coming days still exists.
- EURINR has recently tested 82.80 and currently seeing some retracement around 81.20. Price is likely to find support 81.00-81.10 and retest 82.80 in coming days.
Important Economic Data and Events (13.12.2018 to 14.12.2018):
- December 13: ECB press conference
- December 14: India’s trade deficit & IIP for Nov’18
- December 14: RBI meeting
Yesterday’s Market Recap:
- Yesterday owing to RBI’s active intervention INR closed no major weakness. The INR opened above 72 levels after after struggling for major part of the day managed to close at 72.01.
- The benchmark NSE too ended the day on gains recovering from previous day loss on back of renewed hope from new RBI chief.
Market Movements & Performance:
