2024-03-21 06:43:39
Morning Alert..
*Rupee slumps to over 2 month low against Dollar, weakened 1.2% in FY24*
The Indian rupee slumped against the US dollar for the second straight session ahead of the US Federal Reserve (Fed) meeting outcome on Wednesday. The local currency fell by 15 paise to settle at Rs 83.16 per dollar, the lowest since January 4. “The rupee experienced a decline driven by the rise in the dollar index, which surged by 0.8 over the past two days to 103.78 before the US interest rate announcement scheduled for later in the evening. With significantly reduced expectations for interest rate cuts in the March policy, the dollar strengthened, leading to overall weakness in other currencies,” said Jateen Trivedi, vice-president-research, LKP Securities. “Speculation suggests that rate cuts might be delayed until the June-July 2024 policy, further fuelling the dollar rally. The tone of the Fed policy review will be crucial, as a hawkish stance could trigger a sharp rally in the dollar index, potentially pushing the rupee lower towards the Rs 83.25-83.3 per dollar range,” he added. Market participants speculated that the Reserve Bank of India (RBI) has been intervening in the foreign exchange market via dollar buys to build the foreign exchange (forex) reserves up to $650 billion by March-end, which further weighed on the rupee.
*Fed meet highlights*
The US Federal Reserve announced its interest rate decision today after a two-day Federal Open Market Committee (FOMC) meeting, leaving the benchmark interest rates unchanged at 5.25 per cent - 5.50 per cent for the fifth straight meeting, in line with Street estimates. However, the FOMC said that it expects three rate cuts in 2024 despite sticky inflation. The rate-setting panel ended its second policy-setting meeting of the year and unanimously voted to hold the policy rate at the 23-year high mark, but said it "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two per cent." FOMC members also left the median projection for interest rates at end-2024 at the midpoint between 4.50 and 4.75. This means they still expect 0.75 percentage points of cuts before the end of the year, which would likely translate into three 0.25 percentage point cuts.
*Global market action*
Dow Jones – Up by 0.26% or 101.66 points
FTSE – Down by 0.01% or 0.92 points
CAC – Down by 0.48% or 39.64 points
DAX – Up by 0.15% or 27.64 points
Gift Nifty – Up by 0.75% or 165.00 points
*FII/DII activities*
FII – Sold 2599.19 Cr worth of shares
DII – Bought 2667.52 Cr worth of shares.
*Primary market activities*
P&G Health Ltd – 93%
Krishna Institute of Medical Science Ltd – 87.8%
Blue Dart Express Ltd – 87.1%
Westlife Foodworld Ltd – 87%
AIA Engineering Ltd – 85.7%
*Primary market activities*
IPO opening today
Vishwas Agri Seeds Ltd (NSE SME) – Issue size 25.80Cr
Listing today
Krystal Integrated Services Ltd (Main board) – Subscribed 13.49x
*Commodities updates*
Gold – Rs 67545/10gm, Silver – Rs 75338/kg, Brcrude – Rs 6745/barrel, Copper – Rs 754/kg.
*Corporate News*
JSW MG Motor India to invest Rs 5,000 cr; focus on new energy vehicles.
Himadri Speciality Chemical to acquire 40% stake in Invati Creations.
L&T Technology Services to train 1,000 engineers in Nvidia's GenAI software.
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