US economy was growing with its fastest pace since 2008, we have seen Dow Jones Industrial Average and S&P500 index making fresh 52week high. This good news is not really good for India, as we see US Dollar was gaining strength across all other currencies. This impact was seen in Indian rupee INR, due to strong US dollar there was weakness in Indian rupee. Weakness was a bigger one as we saw, INR quotes on MCX was seen around 54 level mark this move was from 46 to 54. Indian rupee being depreciating, this creates extra cost on imports. India being one of largest oil importer, depreciating Indian rupee makes oil imports costlier. Due to hike in fuel prices direct impact is on food inflation, it becomes an issue, government then tightens monetary system by hikes in interest rates. Interest rate hike has direct impact on growth; slowdown in growth is then responsible for selling in nifty future. This is how strong growth in US is not good for nifty future, however IT sector outperforms in such time due to added USD revenues.
About Bhaveek PatelBhaveek Patel is technical analyst and investor, his areas of interest includes stock market, forex and gold.
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[…] so will in India. Therefore, more selling could be seen in near term in markets. Also we are seeing strong USD in near medium term, another major factor which should not be ignored. We might be in beginning of […]