Rupee is likely to extend previous gains, tracking modest losses in the greenback overnight. On Wednesday, rupee ended stronger at 62.36, compared with its previous close of 62.50 per dollar after weaker-than-expected U.S. retail sales data encouraged view of an extended period of low U.S. rates. Local stocks dropped as Pharma, telecom and realty stocks led losses for key benchmark indices. The barometer index, the S&P BSE Sensex, fell below the psychological 29,000 mark. The Sensex had reclaimed the psychological 29,000 mark after registering decent gains during the previous trading session on Monday. The Sensex and the 50-unit CNX Nifty, both, hit one-week closing low.
Inflation based on the wholesale price index (WPI) stood at negative 2.33% in March 2015 compared with a reading of negative 2.06% in February 2015. Meanwhile, WPI inflation for January 2015 was revised downwards. WPI inflation for January 2015 showed a negative reading of 0.95% compared with a negative reading of 0.39% reported earlier. As per the data released by the Reserve Bank of India, India`s services export increased 7.2% to US$ 14.1 billion, while services imports jumped at 11-month high pace of 23.6% to US$ 7.9 billion in February 2015 over February 2014.
The dollar nursed modest losses against the yen and euro early on Thursday, but suffered bigger falls versus commodity currencies led by the Canadian dollar. China`s economic growth slumped to a six-year low as manufacturing and retail sales cooled in the first quarter. Growth declined to 7% from the previous quarter`s 7.3 percent, official data showed Wednesday. The European Central Bank, as expected, left official interest rates unchanged. Mario Draghi, the ECB chief noted that there is clear evidence that the policy measures the bank put in place are effective. Borrowing conditions for firms and households have improved notably. ECB is monitoring inflation closely, and still expects inflation to rise back towards its target in 2016 and 2017.
Crude oil futures edged higher after the International Energy Agency raised its demand growth estimate for 2015 by 90,000 barrels a day to 93.6 million barrels a day. Oil traders also eyed reports stating that Saudi-led coalition air strikes bombed rebel targets in Yemen`s main southern city of Aden. Gold stayed mixed after the recent break under $1200 per ounce amid strength in US dollar. Recent data suggests that speculative buying interest is picking up in the yellow metal.
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