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Equity Outflows Weigh, Budget On Tap

INR

INR has opened dealing at 81.80/85 marginally below yesterday's closing levels. USD/INR is up over 1% since Jan 23 lows.

  • Foreign investors sold the most Indian shares in 2 days since June, as the short selling report on the Adani Group continues to weigh on local equities. A net $1.45bn was withdrawn from Indian Equities by global investors on Friday and Monday bring the net outflow for January to ~$3bn. The Nifty has fallen ~3% in the month.
  • From a technical standpoint bulls have regained the upper hand, as we are now dealing above the 20,100 and 200-day EMAs. This opens the 83 as the next target for bulls. Bears look to first break the 100-day EMA at 81.49.
  • The recent easing in oil prices from January highs will have moderately eased pressure on the INR at the margins.
  • On the wires today we have the Indian Govt Budget, with PM Modi facing re-election next year the Finance Minister will need to maintain a balance between expenditure priorities and the need for fiscal prudence. We also have S&P Global Mfg PMI, there is no estimate, the prior reading was 57.8.

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