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USDINR: 76.21 ▼ 0.29%.
GBPUSD: 1.3063 ▲ 0.52%.
EURUSD: 1.0855 ▲ 0.64%.
India 10-Year Bond Yield: 7.105 ▼ 0.64%.
US 10-Year Bond Yield: 2.874 ▼ 1.39%.
Sensex: 17,136.55 ▲ 1.05%.
Nifty: 57,037.50 ▲ 1.02%.
Key highlights
China held key interest rates for corporate and household loans steady, a surprise move that signals Beijing remains cautious about policy easing even as COVID-19 and the Ukraine war weigh on growth. The People’s Bank of China kept the one-year loan prime rate at 3.7% and the five-year rate at 4.6%.
The Eurozone suffered a trade deficit for a fourth consecutive month in February as surging energy prices led to a sharp increase in the value of energy imports, data showed. Eurostat said the non-adjusted trade deficit of the 19 countries sharing the euro was 7.6 billion euros compared with a 23.6 billion euro surplus a year earlier in February 2021.
The BoJ boosted efforts to defend its yield target, making a fresh offer to buy an unlimited amount of the 10-year bonds for four consecutive sessions. The move comes as the yield on the 10-year JGB remained at 0.25%, the upper limit of its target of around zero percent, throughout Wednesday, despite the central bank's offer to buy an unlimited amount of the 10-year bonds at that rate.
USD/INR movement
The USDINR pair made a gapped-down opening at 76.3950 levels and traded in the range of 76.17 – 76.5050. The pair closed the day at 76.21. The USDINR pair ended down tracking the pullback in the US dollar from a 2-year high and also due to the inflows into the domestic equity market. As per market participants, inflows related to SBI raising $500 million via syndicated loans too supported the demand for the rupee. However, Brent crude continued to trade at an elevated price that capped further gains for the rupee.
Global currency updates
The pound edged higher against the US dollar on the pullback in the dollar index and signs of stability in the equity markets. Today due to the absence of any major market-moving economic releases from the UK, the USD price dynamics played a key role in influencing the GBPUSD pair.
Euro traded slightly higher against the US dollar due to a pullback in the dollar index. Meanwhile, investors are also focusing on the appearance of the European Central Bank's Christine Lagarde, which is due on Thursday. This will provide guidance to the market participants above the likely monetary policy announcement by the ECB. Along with this, the appearance of Federal Reserve's Jerome Powell will also hold significant importance for the Euro currency.
Bond market
The 10-year U.S. Treasury yield fell, retreating from levels not seen in more than three years. The yield on the benchmark 10-year Treasury note dipped more than 5 basis points to 2.865%. The yield on the 30-year Treasury bond moved 6 basis points lower to 2.927%. India's 10-year yield slipped today as it closed the day at 7.105%. This could be majorly due to expected inflows in the domestic market seeing lucrative levels. The overall movement across the sovereign bond curve remained within 5 basis points.
Equity market
Indian equity benchmarks halted a five-day losing streak led by strength in IT, auto, consumer durable and pharma stocks, shrugging off mixed moves across global markets. Broader markets were a mixed bag at the close, as the Nifty midcap 100 rose 0.8% but its smallcap counterpart declined 0.2%. Indian stocks indices ended higher with the Sensex ended 1.02% higher at 57,037.50 while the Nifty rose 1.05% to settle at 17,136.55. Investors awaited more earnings reports from India Inc for cues.
Evening sunshine
Focus to be on the US Existing Home Sales data due later today.
European stocks saw some positive gains after opening around the flat line as investors monitor developments in Ukraine. U.S. index futures were steady, reversing earlier losses, as a rally in Treasuries signaled calming nerves over inflation and Federal Reserve rate-hike bets. Investors are also digesting the latest gloomy global economic forecasts from the IMF and World Bank. The market would closely watch out for US Existing Home Sales data and FOMC members’ speech due later today.
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