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Market Round-up

* The Indian rupee ended positive against the US dollar for the second straight week, supported by robust domestic macroeconomic data and foreigners’ inflow.

* Foreigners stepped up purchases of the nation’s bonds, and inflows related to MSCIrelated changes boosted the local currency. However, further appreciation in the rupee is capped by higher crude oil prices. Crude oil prices rose more than 4.0% last week.

* Other Asian currencies were mixed against the greenback, with largely range-bound moves affected by local data. The dollar index, which gauges the greenback's strength against a basket of six currencies, dipped marginally by 0.07 percent to 103.86. While EURO registered its second consecutive weekly gain, it rose by 0.15 percent.

Key Developments:

* India’s gross domestic product rose 8.4% from a year ago. GDP figures for the previous two quarters were revised to above 8% as well. The print suggests that growth is accelerating more quickly than the RBI anticipated.

* Foreigners continue to pile into the nation’s debt market with inflows at $4.9b in the first two months of the year.

* The most recent RBI data shows that India's foreign exchange reserves increased by $2.975 billion to $619.072 billion for the week that ended on February 23.

* On the domestic equity market front, Sensex climbed 0.91 percent to settle at a new peak of 73,806. The Nifty rose 0.75 percent to close at a record of 22378.40.

USDINR Outlook:

The short-term outlook for the rupee is moderately positive amid strong macro data, a recorded high equity market, and positive overseas inflow. However, the uptick in crude oil prices and the fact that the RBI continues to build FX reserves act as headwinds for the local unit. The spot USDINR range is 82.50 to 83.25.

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