Rupee could extend its losses on account of a soaring US dollar overseas, although some recovery is expected after the sharp decline. The...
Rupee could extend its losses on account of a soaring US dollar overseas, although some recovery is expected after the sharp decline. The domestic currency pared some of its losses in late trades yesterday to end at Rs 62.77 against the greenback after having dropped to a low of 62.81 intraday, its lowest level since early this year.
Local indices edged lower amid high volatility during the latter part of the trading session. The barometer index, the S&P BSE Sensex, hit its lowest closing level in almost four weeks. The 50-unit CNX Nifty hit its lowest closing level in almost two weeks. The market breadth indicating the overall health of the market was negative. The Sensex fell 134.91 points or 0.47% to settle at 28,709.87.
India`s current account deficit (CAD) narrowed to US$ 8.2 billion (1.6% of GDP) in Q3 of 2014-15 from US$ 10.1 billion (2.0% of GDP) in Q2 of 2014-15, while the CAD doubled from US$ 4.2 billion or 0.9% of GDP in Q3 of 2013-14. The merchandise trade deficit (US$ 39.2 billion during Q3 2014-15) widened on a q-o-q basis on account of a larger decline in merchandise exports (7.3%) than in merchandise imports (4.5%); in terms of y-o-y changes too, the trade deficit in Q3 2014-15 widened due to a decline in exports (1.0%), while imports increased (4.5%). Thus, the reduction in the CAD in Q3 2014-15 was primarily on account of net exports of services, which picked up in q-o-q terms.
Overseas, China`s annual consumer inflation recovered in February, exceeding expectations, but producer prices continued to slide, underscoring deepening weakness in the economy and intensifying pressure on policymakers to find new ways to support growth. The consumer price index (CPI) rose 1.4% in February. The producer price index (PPI) declined 4.8% in February- its five year low. The European Union is urging member countries to move quickly on a new investment plan so that major infrastructure projects like broadband and energy networks can be launched this year.
Crude oil eased as investors awaited this week`s energy agency reports for a fresh assessment of global oil supply and demand balances. Gold stayed under pressure after breaking heavily post the US nonfarm payrolls. Other commodities also stayed stressed as the US dollar hit fresh multiyear highs against both the euro and the yen.
In the global currency market, the euro fell to a fresh 12-year low early on Wednesday, extending a broad decline just days after the European Central Bank kicked off its 1 trillion euro bond-buying program.
