The stronger dollar era may be on borrowed time, says Stephen Roach, one of the world's leading authorities on Asia. The former chairman of Morgan Stanley Asia is projecting a very, very sharp fall for the greenback, going up to 35%, against other major currencies. This, he said, may happen in next one year or two. He based his thesis on the US' very low domestic savings rate, a chronic current account deficit and a steady focus on decoupling itself from the rest of the world & walking away from globalisation. A weaker dollar is considered good for emerging markets assets, but has the potential of triggering currency wars.
MARKET CUES: Where do we stand >>>  | Nifty futures on Singapore Exchange traded 25 points lower at 7 am (IST) signalling a weak start ahead on Dalal Street |
| On Tuesday, Nifty formed a bearish candle on the daily chart with a longer lower wick, reflecting the recovery from the day's low. Analysts said the index will face immediate resistance in the 9,960-10,000 range while the 9,726 level continues to be the immediate support to watch out for. |
| Asian stocks were mixed as investors weighed the lingering concern over further coronavirus outbreaks. Japanese shares gave back a sliver of Tuesday's more than 4% surge and Korean equities slipped, while those in Hong Kong and Australia edged higher. |
| US stocks extended gains for the third consecutive session on Tuesday after retail sales rebounded in May. Dow jumped 526 points to 26,289, while S&P500 climbed 1.9% and the Nasdaq 1.8% |
| The rupee pared initial gains and closed 17 paise lower at 76.20 against the US dollar on Tuesday |
| The dollar held firm against many of its rivals. The euro lost 0.5% on Tuesday after hitting a three-month high a week ago. The Australian dollar eased off 0.4%, while the yen is stuck in a narrow range so far this week. |
| Oil prices retreated on Wednesday, weighed down by an increase in US crude inventories and worries about a potential second wave of the coronavirus pandemic. Brent crude futures fell 40 cents, or 1.0%, to $40.56 a barrel, while WTI crude futures fell 59 cents, or 1.5%, to $37.79 |
| Gold prices in India edged higher on Tuesday amid mixed global cues. On MCX, August gold futures rose 0.35% to Rs 47,180 per 10 gm after a two-day decline. Silver futures rose 0.7% to Rs 47,719 a kg. Gold prices in India have remained volatile after hitting a record high of about Rs 48,000 last month. Globally also gold has struggled to break above $1,750 an ounce. |
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Fed bond buying to boost FPI flows… Fresh US measures to lift a sagging local economy through a dedicated corporate bond buying programme should enhance the flow of overseas funds into India, which is set to outdo competing markets in generating investment returns over the next year. Analysts hope that the rising cash pool overseas will likely trigger a bout of FPI inflows into debt and equities and global investors seeking higher yields in emerging markets will certainly consider India. Investments in rupee-denominated assets are likely to yield higher at least by the end of the next calendar year, Bloomberg data showed.
Read More India-focused FPIs may shift out of HK… New Delhi may cause several overseas portfolio investors in Indian assets to ditch their North Asian base of Hong Kong and drop anchor in the Lion City of Singapore instead. With India planning to impose curbs even on portfolio investments coming from neighbouring countries, including China, European and American funds investing in the country want to move out of Hong Kong, unwilling to be put at a disadvantage in comparison with peers based out of Singapore or Mauritius.
Read More India's employment rate up 3.3%… India's employment rate improved by 3.3 percentage points to 35.7% for the week ended June 14, as businesses started reopening and people joined the workforce, showed a weekly survey by the Centre for Monitoring Indian Economy. Though this is the highest weekly jump so far, it continues to be lower than the employment rate of 39.5% in the pre-Covid-19 days during the three months ending February.
Read More India Inc shifts to bigger banks…. Indian companies are fleeing small banks and moving towards larger lenders as slower economic growth, build up in nonperforming assets, liquidity issues and the demand destruction caused by Covid-19 pandemic have shaken customer confidence in the banking sector, particularly private lenders. This has led to a flight to safety and a surge in customer deposits and corporate relationships with bigger and more stable banks such as SBI, ICICI, Axis and HDFC Bank, showed a study.
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India lost 20 men in China border tension… Tensions along the China border spiked to the highest in nearly five decades after 20 Indian military personnel, including a colonel-rank officer, were killed in Galwan Valley that has seen a six-week-long standoff with People's Liberation Army. The Indian Army said the soldiers — including the commanding officer of 16 Bihar Regiment, in charge of the area — died while a 'de-escalation process' was under way. There have been reports of casualties on the Chinese side, but the numbers are not available.
Read More BNP Paribas shuts wealth division… . French bank BNP Paribas has decided to shut its domestic unit that caters to the country's rich investors. High costs, growing losses and shrinking margins may have prompted BNP to close its domestic wealth unit after two decades of existence in the country, said people familiar with the matter. BNP Paribas Wealth Management, the largest foreign wealth manager in India, handled client money worth $14.72 billion (about Rs 1.1 lakh crore) as of December 2019.
Read More Q1 advance tax flow drops 79%... India Inc's advance tax payments for the first quarter plummeted sharply by 79% to Rs 8,500 crore, reflecting a severe economic downturn and muted corporate profits in the coming months. Economists said the reductions were in line with expectations for the full year with growth forecasts in the negative, more so due to the lockdown which almost obliterated demand, consumption and economic activity in the first quarter. Lower tax payments, they said, also indicated possible deferral of payments owing to liquidity crunch being faced by businesses.
Read More Meanwhile... Health insurance not enough for Covid treatment…. A medical insurance policy may not be enough to protect you from exorbitant costs being charged by some hospitals for coronavirus treatment, latest claims data for the insurance industry shows. The average insurance settlement for a patient hospitalised for Covid-19 is Rs 90,118 — significantly short of the average claim size of Rs 1.56 lakh. This was revealed in the latest industry data periodically compiled by the General Insurance Council.
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