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Market Round-up

* The Indian rupee gained for the eighth day in a trot to finish the week with a gain of 24 paise to 82.92, the strongest closing since Sept.2022 and the best performer among the Asian currencies amid high corporate dollar inflows, lower crude oil prices, central bank’s dollar supply, better growth number and political stability. This week’s trade number and factory-level inflation will provide the near-term direction for the local rupee.

Key Developments:

* India’s inflation accelerated to a four-month high as food prices climbed, justifying the central bank’s caution in keeping interest rates higher for longer. The consumer price index rose 5.69% in December from a year earlier, compared with a 5.55% reading in November, statistics ministry data showed Friday.

* Forex reserves declined sharply by $5.89bn to $617.3bn for the week ending January 5 after rising for four consecutive weeks. So far, this fiscal, the reserves have increased by $55.72bn.

* Last week, Foreign institutions sold $322mln in equities and $271mln in debts.

* India’s benchmark Nifty gained 0.85% to 21.894.6, after touching a record high of 21928.25.

* Brent Crude oil whipsawed during the week before setting at $78.29 with a loss of 0.6% amid expectations of a slower pace of demand growth, while ample flows from non-OPEC+ countries loosen balances and keep a lid on prices.

* The US and UK launched about 70 airstrikes on Houthi targets in Yemen early on Friday in a bid to stop the Iran-backed group’s shipping attacks in the Red Sea.

* A gauge of greenback strength was little changed, erasing early gains as two-year Treasury yields slid to the lowest level since May after declining producer prices in December.

* PBOC refrained from cutting a key rate in Jan. as it focused more on direct support to loan growth.

* USDINR Outlook: Spot USDINR is heading towards a 200-day simple moving average with a bearish formation of lower tops and bottoms on the daily chart. Momentum oscillators and indicators turned negative exhibiting continuation of a weak trend.

USDINR

USDINR Jan Futures Daily Chart

Sell USDINR Jan Fut Below 82.90 SL 83.30 Target 82.50/82.30

EURINR

EURINR Jan Futures Daily Chart

Buy EURINR Jan Fut above 91.40 SL 90.40 Target 92.75

GBPINR

GBPINR Jan Futures Daily Chart

Buy GBPINR Jan Fut above 106.20 SL 105 Target 107.50

JPYINR

JPYINR Jan Futures Daily Chart

Sell JPYINR Jan Fut at 58.10 SL59.10 Target 56.70

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