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Published on 12/08/2020 11:30:39 AM | Source: ICICI Direct

The dollar-rupee contract on the NSE was at 74.80 in the last session - ICICI Direct

Posted in Currency Report| #Currency Tips #ICICI Direct

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Forex and global equities

Spot Currency

* Rupee spot prices appreciated after remaining in a narrow range for more than a week. Positive equities and a weakening dollar have helped the currency to move lower. Spot prices settled at the strongest levels of the day while futures strengthened by 28 paisa during the day

* Upbeat US non-farm payrolls may have supported the US dollar early in the week. Now it is the lack of progress in Washington that can be mostly attributed to the greenback's advance. Expectations of a capital gains tax cut announcement have acted as a dampener for the US$

Global Bonds

* In the first half, the Nifty managed to cross 11300 but was unable to hold on to its decent gains. At higher levels, profit taking was seen in technology, pharma and auto stocks whereas buying interest was seen in banking and metal stocks. Looking at the OI build-up in 11400 and 11500 Calls, these levels should be immediate hurdles on upsides. On the other hand, 11200 remains a support on downsides

* On Tuesday, the Bank Nifty rose 1.5% to close above its Call base of 22000, led by HDFC Bank and Axis Bank while follow-up buying was also witnessed in midcap as well as PSU banks

FII Activity

Foreign institutional investors (FII) were net buyers to the tune of | 975 crore on August 10, 2020. They bought | 1272 crore in the equity market and sold | 297 crore in the debt market. FIIs have bought equities worth | 11336 in August so far while in the debt market they were net sellers of | 270 crore

 

INR futures and Outlook

Currency futures on NSE

* Market participants continued to look to the US political scenario, where Republicans and Democrats are still debating a new fiscal stimulus package to counteract the impact of the Coronavirus on the economy

* The dollar-rupee contract on the NSE was at 74.80 in the last session. Open interest in the August series increased 2.8% while it increased almost 5% in the next series

 

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