USDINR opened at 73.80 and the pair traded in the 73.73-74.13 range. Spot USDINR closed at 74.04, gain of 20 ps USD as against prior close of 73.84. RBI reference rate was fixed at 73.77 on 28/09. Oct USD/INR closed at 74.31, gain of 26 ps for USD as compared to prior day’s close of 74.05. Oct Euro/INR closed at 86.87, GBP/INR at 101.15 and Yen/INR at 66.73. USDINR fwd premia was trading at around 4.38% p.a. FX reserves stands at USD 640 bn.
|PAIRS||RBI REF RATE (28/09)|
In Sept, FII’S have net bought Rs 8773 cr in Equity segment and have net bought Rs 4548 cr of debt. In this financial year, FII’S have net bought Rs 6398 Cr worth of Indian Equities and have bought Rs 12413 Cr worth of Indian debt. In 2020-21 financial Year, FII’S nett bought Rs 2,74,203 Cr of Equities and have sold Rs 42820 Cr in debt.
Benchmark Nifty declined 0.60% y’day. DOW declined 569 points (1.63%). Nikkei was down 0.94% and Hang seng climbed 0.80% y’day.
Euro is now at 1.1682, Pound at 1.3538, Yen at 111.61.
Commodities: Gold is now at USD 1735 and WT1Crude at USD 74.40/Brent at USD 77.40.
Interest rates: USD 10 Yr yield is at 1.55% and 3 m libor closed at 0.12%. Indian 10 yr benchmark yield closed at 6.21%.
Economic news: Rupee declined as majors showed weakness against USD. Stop loss buying above 73.93 also contributed to Rupee’s fall to 74.13. Indian Equities had a roller coaster ride and ended weaker, tracking decline in European indices. Strong US Treasury Yields, climbing Crude prices are contributing to USD gains. Indian Auto maker Maruti is likely to ramp up production in Oct as semiconductor shortage may ease with plants opening up in Malaysia and Taiwan. India is in advanced discussions with Taiwan for setting up semiconductor manufacturing that would cater to telecom and auto sectors. In the last few days, auto and power sectors have rallied.
Indian 10 Year yield is higher despite lower than expected Govt borrowing in H2. Advance tax collections is robust. With Crude closer to USD 80 mark, inflation may weigh on yields and Rupee.
FOMC member stated that “Inflation could also be a lot more persistent than we had hoped and in that case we will have to recalibrate how we are going to keep inflation under control.”
Global stocks declined steeply on steep energy prices, rising yield and climbing inflation worries.
Data highlights: – US house price index climbed 19.9% y/y and consumer confidence declined to 109.3.
Wednesday’s calendar: – US pending home sales
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed below 50 and 100 day major moving averages, but above 20 and 200 day moving averages. 20 day moving average is at 73.50. 50 day moving average is at 74.200 day moving average is at 73.57. Daily MACD is in buy zone, implying bottom at 72.92. Important resistance is at 74.50 and important support is at 73.93/73.82/73.74. Spot closed above its average level of the day.
Intraday supports and resistances for Oct contract are:
PP: 74.20 S1:74.05, S2:73.80, R1:74.45, R2:74.60
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
USDINR Imports hedging can be done at around 73.85/73.75.
Exporters can hedge EURINR receivables exposure at 86.75.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is below 50, 100 and 200 day moving averages. Major resistance is at 1.18/1.1910. Next major support is at 1.1665. Daily MACD is in sell zone, implying an important top at 1.19. Weekly MACD is in sell zone, implying important top at 1.2270.
GBP/USD: The pair is below 50 and 200 day moving averages. Daily MACD is in sell zone, implying important top at 1.39 and weekly MACD is in sell zone, implying important top at 1.4240. Important support is at 1.36.Important resistance is at 1.39.
USD/YEN: The pair is above major moving averages. Daily MACD is in buy zone, implying important bottom at 109.10. Next important resistance is at 111.60. Important support is at 109.10/108.70
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