India’s fiscal deficit should fall from November onwards. High gold imports in September and October along with Chinese imports for the festival will result in October fiscal deficit to be higher than September. One need not be worried as fiscal deficit will fall from November till March. To me the rise in fiscal deficit if backed by higher imports (excluding gold and energies) is a sign of economic optimism.
The NDA government is now in real action. Policy paralysis will soon be history. The government has shown indication by announcing labour reforms among other things. Good news on Indian economy will in future come in small batches. Apart from global risk, investors and analysts alike are now looking on the positive side of Indian economy. However rupee will be very volatile in the next four weeks.
Stock markets will be the key. Rupee (usd/inr) will weaken if they fall today. Importers will be forced to cover their near term payables if rupee weakens today. There can be massive short covering in usd/inr (inter-bank) if it breaks 62.76 before next Wednesday. Next week is also a shortened trading week due to Diwali. Next Thursday and Friday, Indian financial markets are closed.
Usd/inr October 2014 (expiry on 29th October): A break of 61.92 will result in 62.09 and 62.36. Initial support is at 61.69 and there will be sellers only below 61.69 with 61.47 and 61.22.
Euro/inr October 2014 (expiry on 29th October): It can rise to 79.47 and 80.02 as long as it trades over 78.76. There will be sellers only below 78.76 today.
Gbp/Inr October 2014 (expiry on 29th October): Resistance is at 99.57 and only a break of 99.57 will result in further rise to 100.02 and 100.47. Initial support is at 99.12 with 98.84 as the key support.
Jpy/Inr October 2014 (expiry on 29th October): A break of 58.42 will result in 58.96-59.47. Initial support is at 57.96 and there will be sellers only below 57.96.
The NDA government is now in real action. Policy paralysis will soon be history. The government has shown indication by announcing labour reforms among other things. Good news on Indian economy will in future come in small batches. Apart from global risk, investors and analysts alike are now looking on the positive side of Indian economy. However rupee will be very volatile in the next four weeks.
Stock markets will be the key. Rupee (usd/inr) will weaken if they fall today. Importers will be forced to cover their near term payables if rupee weakens today. There can be massive short covering in usd/inr (inter-bank) if it breaks 62.76 before next Wednesday. Next week is also a shortened trading week due to Diwali. Next Thursday and Friday, Indian financial markets are closed.
Usd/inr October 2014 (expiry on 29th October): A break of 61.92 will result in 62.09 and 62.36. Initial support is at 61.69 and there will be sellers only below 61.69 with 61.47 and 61.22.
Euro/inr October 2014 (expiry on 29th October): It can rise to 79.47 and 80.02 as long as it trades over 78.76. There will be sellers only below 78.76 today.
Gbp/Inr October 2014 (expiry on 29th October): Resistance is at 99.57 and only a break of 99.57 will result in further rise to 100.02 and 100.47. Initial support is at 99.12 with 98.84 as the key support.
Jpy/Inr October 2014 (expiry on 29th October): A break of 58.42 will result in 58.96-59.47. Initial support is at 57.96 and there will be sellers only below 57.96.
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