The Indian rupee erased most of the morning gains on Monday and was trading marginally higher, tracking losses in the local equity markets.
This week traders are likely to adjust positions according to government announcement in the railway budget on 26 February and the Union Budget on 28 February.
Traders will look for the direction of government policy through these two announcements and will keep an eye on annual economic outlook survey on 27 February.The local unit opened at 62.15 per dollar. At 2.46pm, the home currency was trading at 62.21, up 0.02% from previous close of 62.22.
The Sensex Index fell 0.67%, or 195.81 points, to 29,035.60.The yield on India’s 10-year benchmark bond was trading at 7.692% compared with its Friday’s close of 7.695%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has gained 1.4%, while foreign institutional investors have bought $3.12 billion from local equity and $4.9 billion from bond markets.Global rating agency Standard and Poor’s (S&P) on Monday warned that India’s weak fiscal and debt indicators, coupled with the low income levels, “constrain” the sovereign rating.
“India’s low income levels and weak fiscal and debt indicators constrain the country’s credit profile,” S&P said in a note.The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.66, up 0.38% from the previous close of 94.253.
Source:- livemint.com
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