Thursday, 11 June 2020
Our View in a Snapshot
| NIFTY | USD/INR | |
| Expected Open | 10100 | 75.60 |
| Expected Range | 9950 – 10200 | 75.40 – 75.80 |
- Federal Reserve to keep buying bonds and sees no rate hike through 2022
- Asia stocks set to fall on Fed’s dour outlook
- Oil slides below $41 as U.S. inventory rise revives glut worries
Federal Reserve Rate Decision
The Federal Reserve says it will keep buying bonds to maintain low borrowing rates and support the U.S. economy in the midst of a recession. And it says nearly all the Fed’s policymakers foresee no rate hike through 2022.
The Fed has cut its benchmark short-term rate to near zero. Keeping its rate ultra-low for more than two more years could make it easier for consumers and businesses to borrow and spend enough to sustain an economy depressed by business shutdowns and high unemployment.
Equity
Asian stocks were set to fall on Thursday after gloomy economic projections from the U.S. Federal Reserve sent the greenback and most Wall Street shares lower.
Australian S&P/ASX 200 futures were down 1.08%, while Japan’s Nikkei 225 futures fell 1.2%. Hong Kong’s Hang Seng index futures were 0.31% lower. An S&P index of bank shares, which tend to benefit from rising rates, fell 5.8% in its biggest daily percentage decline since April 15. On Wall Street, the Dow Jones Industrial Average fell 1.04%, the S&P 500 lost 0.53%, while the Nasdaq Composite gained 0.67%.
Our View on Stock Market
The Indian stock market is expected to open in the red tracking its Asian peers after a gloomy economic projections from the US Federal Reserve.
The Nifty futures are likely to open around 10,100.
The likely range for the day is 9,950 – 10,200
Currencies
The dollar steadied against riskier currencies and the safe-haven yen hit a one-month high on Thursday, as the U.S. Federal Reserve’s dour economic outlook spooked investors.
The greenback fell about 0.4% against a basket of major currencies to 95.882 after earlier sliding to 95.714, a level not seen since mid-March.
The euro rose as high as $1.1422 and sterling reached $1.2812, with the dollar hitting a three-month low of 0.9425 franc versus the Swiss currency.
Our View on USD / INR
The Indian rupee is expected to trade lower as Equities are likely to decline following Feds gloomy economic outlook results in Equity fall worldwide.
The rupee will likely be quoted around 75.60 to a dollar in early trades.
The Rupee is likely to trade in the Range of 75.40 to 75.80
OIL
Oil slid below $41 a barrel on Wednesday after U.S. data showed crude inventories rose to a record high, reviving worries of a persistent glut due to weak demand during the lingering coronavirus crisis.
Crude stocks rose by 5.7 million barrels in the week to June 5 to 538.1 million barrels. Brent crude fell 23 cents, or 0.6%, to $39.04 a barrel . U.S. West Texas Intermediate (WTI) dropped 13 cents, or 0.3%, to $38.81 after falling more than 2% in the session.
Source : Reuters
