Stock Market Cues: US Employment Data, Rupee At Record Low And Other Factors Set To Affect Trade Today

Stock Market Cues: On December 17, the headline indices are likely to begin the session on a lacklustre and muted note. The likelihood of a muted start comes amid a shift in investor sentiment towards caution, persistent foreign fund outflows and the Indian rupee declining to a record-low. The Gift Nifty also opened marginally lower at 25,924.50 down by 28.5 points, indicating a flat start with a negative bias for the benchmark indices.

On December 16, the headline indices closed in the red zone. The BSE Sensex finished the session with a decline of 533.5 points or 0.63 per cent at 84,679.86 levels. The Nifty 50 finished the session around the 25,860.1 mark down by 167.2 points or 0.64 per cent.

Stock Market Cues For Today

On December 17, weakness in the Indian rupee, the release of US jobs data, persistent foreign institutional investor (FII) selling and changes in commodity prices are expected to impact trade.

Rupee Lows

The Indian Rupee hit an all-time low of 91.08 against the US Dollar in the early hours of December 17. The decline in the Indian rupee is a significant headwind as it increases the cost of imports and affects companies whose operations involve importing raw materials. Notably, today’s decline marks a significant 6 to 7 per cent decline year-to-date. Factors such as FII selling and uncertainty regarding the signing of an India-US trade deal have contributed to the decline seen in the rupee.

US Jobs Data

The US jobs and employment data(Non-Farm Payroll) for the month of November was released on December 16. According to a report by CNN which cited data by the Bureau of Labor Statistics, the US economy lost 1,05,000 jobs in October and added 64,000 jobs in November. Additionally, the unemployment rate rose to a four-year high of 4.6 per cent. Notably the unemployment rate has climbed to its highest level in four years, reinforcing signs of a labor market losing momentum after a soft October. The BLS did not publish the jobless rate for October as it could not ascertain the data due to the government shutdown. US jobs data, such as the Non-Farm Payroll (NFP) and unemployment rate impact markets beyond the US as the labor health dictates the flow of global capital. The data has a bearing on the US Federal Reserve’s policy, if the US adds more jobs than expected, the Fed can potentially keep interest rates high, which in turn increases the lucrativeness of US Treasury bonds for FIIs. However, if the hiring activity is slow and unemployment rate is high, the US Fed is likely to cut interest rates, which can turn investor sentiment in favour of high-growth markets like India.

Crude Oil Prices Today

On December 17, crude oil prices inched upwards following US President Donald Trump’s order for "a total and complete" blockade on all sanctioned oil tankers entering and exiting Venezuela. The price of West Texas Intermediate crude traded around $55.92 down by $0.69 or 1.23 per cent. The price of Brent Crude was around $59.60 up by $0.68 or 1.15 per cent in the early hours of the day.

Gold Rate On December 17

Physical gold prices declined in the early hours of December 17 as the price of 24 karat gold was Rs 13,400 per gram, the price of 22 karat purity gold was around Rs 12,284 per gram and the price of 18 karat gold was around Rs 10,053 per gram.

Asian Indices Trade Mixed

On December 17, major Asian indices traded higher, the Nikkei 225 and the Hang Seng gained 0.41 per cent and 0.22 per cent respectively. On the other hand the KOSPI and the Shanghai Composite index traded with gains of 0.88 per cent and 0.17 per cent respectively.

US Markets

US market indices closed the session mixed on December 16, the Nasdaq Composite closed with gains of 0.23 per cent. On the other hand, the S&P 500 and the Dow Jones Industrial Average (DJIA) closed lower by 0.24 per cent and 0.62 per cent respectively.