FX Market Insight
In the previous session, the rupee plunged to close at a fresh all-time low against the US dollar as a lacklustre trend in domestic equities and persistent foreign fund outflows weighed on investor sentiments. At the interbank foreign exchange market, the local unit opened at 77.99 and finally settled at its all-time low of 78.17, down 13 paise over its previous close of 78.04 against the greenback
Spot USDINR is facing stiff resistance around 78.30 while on the downside also it has limited space up to 77.70. By the time a new trigger comes, the pair is expected to consolidate in the range of 77.70 to 78.30
The U.S. dollar extended its gains on Wednesday, after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation.
The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, was up 0.35% at 105.66.
Equity Market Insight
The Indian stock market is predicted to open in the green, as the broader index in India is expected to open with a gain of 126 points, according to SGX Nifty trends.
The BSE Sensex dropped 152 points to 52,541, while the Nifty50 dropped 40 points to 15,692 and created a small-bodied bearish candle on the daily charts that resembled an Inside Bar pattern formation.
The pivot charts show that the Nifty’s important support level is 15,653, followed by 15,613. The major resistance levels to watch if the index rises are 15,993 and 16,184.
Asia-Pacific equities soared on Thursday, followed U.S. stocks, after the Federal Reserve boosted interest rates by 75 basis points, the most aggressive increase since 1994.
After markets opened, Japan’s Nikkei 225 index gained about 2%, with automakers and tech stocks leading the charge. In Australia, the S&P/ASX 200 index was trading 0.6 percent higher. The Kospi index in South Korea also increased by 1.61 percent.
After the Federal Open Market Committee raised the level of its benchmark funds rate to a range of 1.5 percent -1.75 percent — the highest since just before the Covid epidemic began in March 2020 — Wall Street was choppy, but market indices soared to session highs.
“Either a 50 basis point or a 75 basis point rise seems most likely at our next meeting,” Fed Chairman Jerome Powell said at his afternoon press conference.
The Dow Jones Industrial Average ended a five-day losing trend by closing at 30,668.53, up 303.70 points, or 1%. The S & P 500 increased 1.46 percent to 3,789.99, while the Nasdaq Composite increased 2.5 percent to 11,099.15.
Oil prices plummeted more than $3 on Wednesday as markets worried about a drop in demand following the Federal Reserve’s three-quarters-point interest rate hike.
Brent crude futures for August finished at $118.51 a barrel, down $2.7, or 2.2 percent, after falling as low as $117.75. After falling to a low of $114.60, U.S. West Texas Intermediate crude for July lost $3.62, or 3.04 percent, to $115.31 a barrel.
Gold rallied on Wednesday as the dollar and Treasury yields retreated after the Federal Reserve announced the biggest US interest rate hike since 1994 and flagged economic risks.
Spot gold rose 1.4% to $1,833.42 per ounce by 4:09 p.m. EDT (2009 GMT), while US gold futures settled up 0.3% at $1,819.60 per ounce.
Gold received a shot in the arm as the dollar and yields fell, especially after Fed Chair Jerome Powell said 75 bps hike would not be common and if inflation flattens out, the Fed may not need to be as aggressive in raising rates.
Major Economic Events
Thursday, Jun 16, 2022
BoE QE Total (Jun)
BoE Interest Rate Decision (Jun)
BoE MPC Meeting Minutes
Building Permits (May)
Initial Jobless Claims
Philadelphia Fed Manufacturing Index (Jun)
Disclaimer: All information in this report is collected from various sites on the internet. Although we have taken all precautions for the correct representation of data however we do not take any responsibility for any errors and omissions. The technical analysis and views expressed are the author’s own views. We are not responsible for any losses on account of following the same.