A Greek overhang remains on the global markets while back home, there seems to be no near-term respite for our currency. So, how will the rupee fare in trade today after plunging to an all-time low of 54.49 to the dollar? And will our market break the 5800 barrier? Read on for more...
A Greek overhang remains on the global markets while back home, there seems to be no near-term respite for our currency. So, how will the rupee fare in trade today after plunging to an all-time low of 54.49 to the dollar? And will our market break the 5800 barrier? Read on for more.
CLICK HERE to listen to the pre market cues with moneycontrol.com's Chelsea Saldanha.
Extending their four-month lows, European markets retreated for a third straight session, closing broadly lower as concerns around Greece’s political and financial crisis sapped risk appetite. Financials were the big drag.
Greece: Interim Government
The new general election in Greece is now scheduled for June 17. Meanwhile Pikramenos who is a top administrative court judge is heading the interim government. His role is to only oversee that the elections take place fairly. Meanwhile, latest opinion polls show that leftist leader Alexis Tsipras continues to gain popularity although 80% of Greece still favours staying within the eurozone.
The focus now has shifted to the banks. The ECB confirmed it has stopped providing liquidity to some of the country's banks to limit risk. The lenders will now have to turn to the more expensive Greek central bank for cash but it is unclear which banks have been affected. Greece’s bank support fund says it will allocate 18 billion euro to the country’s four biggest banks as an interim recapitalisation until a full capital plan can be put in place.
Europe Closing: DAX -0.3%, FTSE -0.6%; CAC +0.3%; Italy -0.2%; Spain -1.3%.
In the US, markets ended lower in choppy trading following the Fed's meeting minutes and as ECB halt monetary operations to certain Greek banks, reigniting jitters over the debt-ridden nation.
On the economic data front, Housing Starts rose more than expected in April, gaining 2.6% to a seasonally adjusted annual rate of 717,000 units. And Industrial Production grew 1.1% in April - surging from a contraction of 0.6% in March, its fastest growth in over a year.
US Closing: Dow -0.3% at 12598.5; S&P -0.4% at 1324.8; Nasdaq -0.7%.
- Cite EU & US fiscal policy as reasons to keep rates on hold until 2014.
- Several members say further easing measures could be needed if the economy slows.
Data to Watch
- US Weekly Jobless Claims.
- US Philadelphia Fed Survey.
Asia opens positive on stronger than expected economic growth in Japan. Japan's economy grew 1% in the January-March quarter, powering ahead of other major industrial nations. The rise in GDP translates into an annualised growth of 4.1%, stronger than the 3.5% expected by analysts.
The Nikkei is down 0.3%: Kospi, Hang Seng, Shanghai are up 0.2%; Straits is up 0.5%; Taiwan is up 0.8%.
Commodities & Currencies
In the currency space, the euro hovers near four-month lows on fears of Greece’s exit from the euro. Nymex crude prices slip further as banking troubles in Greece further highlighted the euro zone debt crisis. The Nymex is at USD 93 per barrel levels while Brent hovered around USD 109 per barrel levels. Gold prices recovered slightly after slipping to USD 1,527/oz levels.
Outlook on Rupee
It’s all about the rupee right now. After plunging to an all-time low of 54.49 per dollar, there may be further dollar buying in fear of more steps from the RBI now. From the Asian currency basket, the Korean Won, Malaysian Ringitt and Ruble all fell. Indonesia’s central bank is believed to have intervened.
Although a weaker rupee should help exporters, analysts say overall sentiment is being trumped by concerns that foreign investors will exit India in light of the global risk aversion and the domestic challenges.
Equities plunged as markets globally felt the tremors of the political upheaval in Greece. The Sensex fell to 15974, its lowest level in four months while the Nifty closed at 4,858 down 84 points.
Stocks in News
IL&FS Engineering has bagged a Rs 234 crore contract from RVNL.
Moody's downgrades long-term and short-term ratings of ICICI Bank UK. The ratings agency cut ICICI Bank's long-term debt rating to BAA3 from BAA2.
HDIL will cut its debt by 25-30%. The company is looking to sell two land parcels to raise Rs 500 crore, reports the Economic Times.
The Delhi High Court has asked Jaiprakash Power to stick to the provisions of the power purchase agreement (PPA) to fix the tariff for supply of electricity with PTC, reports the Economic Times.
SEBI passes a consent order in the Educomp Solutions case. The regulator disposed the case against Educomp on a Rs 1 lakh consent fee.
CESC is in pact with Indiabulls to buy two hydro electric projects.
GMR Infra raises Rs 200 crore via NCDs issued to ICICI Bank.
Bajaj Finance plans to raise up to Rs 750 crore.
Insecticides India will market Japan company’s product HAKAMA in India.
Earnings to Watch
Bajaj Auto, United Breweries, Jaiprakash Power Ventures, Mahindra Satyam, Bajaj Holdings, Jaypee Infratech, Asahi Glass, Essar Shipping, GTL Infra, Gujarat Alkalies and PTC India WWIL.