USDINR opened gap up at 73.06 on Friday and the pair traded in the 72.96-73.51 range. Spot USDINR closed at 73.46 , gain of 1 Rupee and 2 ps for USD as against prior close of 72.44. RBI reference rate was fixed at 72.29 on 24/02. Mar USD/INR closed at 74.27, gain of one Rupee and 53 ps for USD as compared to prior day’s close of 72.74. Mar Euro/INR closed at 89.88, GBP/INR at 103.30 and Yen/INR at 69.80.
Rupee plunged 1.4% as FII’s pulled out Rs 13000 Cr . Funds sold heavily as rising USD and Global yields triggered wave of selling in Indian stocks and Global equities. Cross Currencies also plunged lower against USD due to fear of inflation on rising Crude and Global commodity prices. FII’S sold Rs 12800 Cr in equity segment on Friday.
FII’S nett bought Rs 27918 Cr of Indian Equities in Feb . FII’S nett sold Rs 692 Cr of Indian debt securities in Jan . In this financial year, FII’S have nett bought Rs 258565 Cr of Equities and have sold Rs 30624 Cr in debt. In FY 19-20, FII’s sold Rs 10200 Cr of Equities and 47393 cr of debt.
Benchmark Nifty declined 3.76% on Friday. DOW declined 469 points(1.50%).Nikkei declined 3.99% and Hang seng declined 3.64% .
Euro closed the week at 1.2076,Pound at 1.3932,Yen at 106.58.
Commodities: Gold is now at USD 1732 and WT1Crude at USD 61.60/Brent at USD 64.95.
Interest rates: USD 10 Yr yield is at 1.41% and 3 m libor closed at 0.23%. Indian 10 yr benchmark yield closed at 6.22%.
Economic news: Indian Q3 GDP climbed 0.4%, signaling end of recession. Manufacturing grew by 1.6%, agri sector grew by 3.9%, and construction grew by 6.2%. Services remained in contraction mode at -1.6%. Mining contracted 5.9% and trade, hotels and transport contracted by 7.7%.Economy had contracted by 24.4% and 7.3% in Q1 and Q2. Govt expects GDP to contract by -8% in 2020-21. GDP is expected to be between 10 and 12% in coming fiscal.
Indian markets tanked in tandem with Global indices fall as investors pulled out money due to rising yields. This has attracted attention of policy makers. ECB Official noted that policy stimulus might need to step up if yields could remove effective support prematurely. BoE chief economist also warned that out of control inflation is currently the greater risk.
Data highlights: – US personal income climbed 10% m/m, spending climbed 2.4% m/m and Core PCE index climbed 0.3% m/m.
Monday’s calendar: – US ISM(mfrg), construction spending
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 50,100 day moving averages but still above 200 day moving average. 20 day moving average is at 72.80. 50 day moving average is at 73.07.200 day moving average is at 74.15. Daily MACD is in buy zone, implying bottom at 72.30. Important support is at 72.90/72.30 and important resistance is at 73.80/74 . Spot closed above its average level of the day.
Intra day supports and resistances for Mar contract are:
PP:73.92,S1:73.50, S2:72.73, R1:74.69, R2: 75.11
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below 50 moving average, but above 100 and 200 day moving average. Major resistance is at 1.2150. Major support is at 1.1950. Daily MACD is in buy zone, implying an important bottom at 1.1950. Weekly MACD is in buy zone, implying important bottom at 1.1610.
GBP/USD: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 1.3565 and weekly MACD is in buy zone, implying important bottom at 1.2675. Important support is at 1.3760/1.3565 . Important resistance is at 1.4250.
USD/YEN: The pair is above 50 and 200 day major moving averages. Daily MACD is in buy zone, implying important bottom at 104.40. Next important resistance is at 107.20. Important support is at 105.80/104.90./Please call us for clarifications/