Equity Markets Hit Record Highs In Risk On Trade

Rupee forwards indicate another lower open for USD/INR, the pair skirted around 72.60 for the majority of the session yesterday after opening lower, but rose to a session high of 72.69 at the close.

• Data late yesterday showed the trade deficit narrowed slightly more than expected. The deficit in January printed $14.54bn against expectations of $14.75bn. Exports rose 6.2% after a 0.1% rise in December, domestic consumption suffered though and imports only rose 2% after a 7.6% rise previously, but is still positive for the second straight month. This denotes the second month of positive growth for Indian exports led by robust growth in the non-oil and non-jewellery segments, indicating manufacturing activity revival.
• Domestic equity indices have opened higher, the financials sector is seeing strong gains after earlier reports that India had shortlisted four state run banks for privatization. The banks reportedly on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India. The Sensex has hit a new record high in early trade.