The higher crude oil prices and foreign fund outflows could further weigh on the local rupee - HDFC Securities
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Market Roundup
* The Indian rupee is expected to open lower following weaker Asian currencies and risk-off sentiments. The higher crude oil prices and foreign fund outflows could further weigh on the local rupee. On Monday, spot USDINR gained 4 paise to 83.45, another life high. The risk-averse sentiments and foreign fund outflows are pulling the greenback higher. In the near term, the pair has resistance at 83.50 and 83.70 while on the downside it may find support around 83. The bias remains favourable for the dollar amid haven demand and expectation of interest rates to remain higher for longer amid lingering worries over inflation.
* On the positive front, India’s trade deficit narrowed to an 11-month low in March as the nation reined in its import bill and a recovery in global demand helped keep exports steady. The gap between exports and imports stood at $15.6 billion in March.
* IMD forecast an above-normal monsoon this year, raising optimism that ample rains will spur crop output and economic growth and prompt the government to ease curbs on exports of wheat, rice and sugar. Precipitation during the June-September period is likely to be 106% of a long-term average of 87 centimeters, IMD said.
* India's wholesale price inflation quickened in March, led by an increase in vegetable prices. The wholesale price index (WPI) climbed 0.53% year-over-year in March, sharper than the 0.20% rise in February.
* The dollar rose to a five-month high amid higher Treasury yields after a strong retail sales report and haven-related demand on concerns Israel may retaliate against Iran.
* Asian stocks fell and the region’s currencies weakened against the dollar as China’s economic data further weighed on sentiment. China’s slew of economic data was mixed as growth beat expectations in the first quarter, bolstering expectations the government can hit its ambitious annual target. Gross domestic product increased 5.3% in the January-to-March period from a year earlier. The nation’s retail sales and industrial output numbers both fell short of estimates. Retail sales climbed 3.1%, missing an expected 4.8% gain. Industrial output rose 6.1% for the first quarter, compared to an estimate of 6.6% growth.
* Oil whipsawed on geopolitical angst. West Texas Intermediate crude reclaimed the $85 mark, after briefly falling below it, and gold climbed on fears of escalating tensions in the Middle East.
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