Dollar closed at 64.3975 against its opening of 64.4200. Dollar in the offshore market extended gains during evening trades Friday on overseas fund outflows from local stocks amid strong dollar. As dollar is opened at two-month high as investors turn risk averse regarding interest rate worries in the west. Overnight slump in US equities is having cascading effect on other markets. This time the fall is led by sell off in leveraged equity products. Local stocks opened lower tracking sharp fall in Asian market that followed overnight sell-off in US markets on interest rate hike concerns. Globally, Asia shares traded sharply lower Friday in a knee-jerk reaction to an overnight plunge on Wall Street that sent US stocks into correction territory. Also, on Thursday, Bank of England left its monetary policy unchanged and hinted at rising interest rates faster than the market expectations.
The greenback lost grounds after Bank of England hinted towards a faster pace of interest rate hike in its monetary policy statement Thursday. The Bank of England (BOE) signalled in the release of its monetary policy statement yesterday that the need for interest rate rises earlier and potentially larger than previously predicted. US initial jobless claims fell to 221,000 last week from 230,000 in the previous session.
BSE Sensex closed lower by 407.40 points at 34,005.76, while the Nifty 50 fell 107.85 points to close at 10,469.
INTERNATIONAL
Asian stocks fell on Friday, with Chinese shares slipping to multi-month lows after Wall Street shares dropped again in the face of rapidly-rising bond yields, while perceived havens such as the yen and Swiss franc were in demand.
North Korea’s ceremonial leader and U.S. Vice President Mike Pence are set for their first face-to-face encounter on Friday when they attend the opening ceremony of the Winter Olympics in Pyeongchang, South Korea.
Gold held steady amid tumbling equity markets, but a firmer dollar and worries about rising global interest rates dragged on prices.
China’s producer and consumer inflation eased as expected in January, even as global stock markets nosedive on fears that price pressures are slowly building in the United States and Europe.
Oil prices fell for a sixth day after Iran announced plans to boost production and output hit record highs, adding to concerns about a sharp rise in global supplies.