Currency Map:

USD/INR 73.61 73.45 0.21
EUR/INR 85.80 87.08 -1.46
GBP/INR 94 95.39 -1.45
JPY/INR 69.70 70.08 -0.54

Brent Crude closed at USD 41.83VS prior week close of USD 43.10.

Nifty closed at 11050 vs prior week close of 11504.

10 Year G-SEC Yield closed at 6.03%.

Major developments: USDINR traded in the 73.26-73.97 range and closed at 73.61 as against prior week close of 73.45, decline of 0.21% for Rupee w/w. EUR declined 1.46% and GBP declined 1.45% against Rupee. Indian benchmark Equity indices declined 3.94% w/w basis. 10 Year G-SEC Yield closed at 6.03%.

Rupee declined to 73.97, tracking USD gain against majors. USD is also getting support at 73.25, presumably from PSU banks. Indian Equity indices registered sharp fall, weighed down by valuation levels and fear of lockdown in parts of Europe.

FII’S have nett sold Rs 1671 Cr ofIndian Equities in Sept till date . FII’S have nett bought Rs 3468 Cr of Indian debt securities in Sept till date. In this financial year, FII’S have nett bought Rs 85246 Cr of Equities and have sold Rs  37596 Cr in debt. In FY 19-20, FII’s have sold Rs 10200 Cr of Equities and 47393 cr of debt.

Global developments:USD gained and stocks declined as markets may have overestimated June/July recovery as self-sustaining. Fed Vice Chairman said that economy is still in deep hole, despite rebound in last 2 months. Striking a cautious tone, Fed chairman said in his testimony that US economy is recovering with uncertainity and Govt fiscal support is crucial for sustainability of economic recovery. US Congress is still debating stimulus package details, which remains the main hope for sustainability of consumer spending and hence economic recovery. The nature and surge in  infection cases poses downside risks to US and EU growth.                

In a major concern to economic rebound, UK PM issued new restrictions on work to tame surging infections.

EU PMI(services) witnessed a downturn due to rising infections. German economic think tankIfo said Germany’s recession was “rather mild compared with other countries”.

Important developments in coming week:  US employment and spending data.

Currency range forecast: USDINR: 73.15/72.70(support)-73.90/74.40(Resistance), EURINR: 84.10(support)-86.50(Resistance), GBPINR: 92.50(support)-95(Resistance), JPYINR: 68-71.

Suggestion: Cover USD import payables on decline to 73.15/72.70. USD receivables can be hedged at 73.80-74.40+.EURINR payables can be hedged at 84.50. EURINR receivables hedging for 1 month can be considered on climb to 86.50. GBPINR receivables hedging can be done on any rally.

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