While the rupee was caught between dollar offers from state-owned banks and continued hedging demand, similar to recent trading sessions, its Asian counterparts mostly rose between 0.1% and 0.5%.The dollar index fell 0.2% to 99.5, while global shares rose on optimism that an end to the historic US government shutdown was in sight.
India’s stock index, the Nifty 50, rose 0.3%, while Nasdaq futures rose 1.5%.
“While some may argue that the end of the shutdown could be a risky, dollar-negative boost to the FX markets, its impact could be more mixed. Progress toward ending the shutdown could be felt more by risk-sensitive currency rates than by the dollar,” ING analysts said in a note. An easing of dollar strength may help ease some pressure on the rupee, but traders do not expect a meaningful reversal in the absence of a breakthrough in US-India trade negotiations or an upturn. in the inflow of portfolios. Foreign investors sold a net of about $1.5 billion worth of local stocks in November.
However, analysts at Goldman Sachs upgraded Indian equities to ‘overweight’ from ‘neutral’, noting that a year-long downward cycle of earnings revisions appears to have bottomed out.
Their counterparts at HSBC also have an ‘overweight’ recommendation on Indian equities, while also finding value in taking exposure to the rupee and the country’s 10-year government bonds.
#rupee #remains #brink #record #softer #dollar #offering