Daily Brief - 17 May 2024

FTSE 100 dips while oil and gold prices climb

The FTSE 100 is down by 0.2% today after mixed results from major companies. GSK plans to sell its shares in Haleon, affecting stock prices, while HSBC might see changes as its biggest shareholder, Ping An, considers reducing its stake.

Oil prices are up thanks to strong economic signals from China and the US, and gold is also rising due to US inflation data, hinting at possible interest rate cuts. Investors are keeping an eye on EasyJet, Sage Group, and BT Group for further market insights.

Global economic trends are shaping these shifts, signalling potential recovery.

Indian rupee holds steady before national election

The Indian rupee remained stable at 83.48 against the US dollar on Friday, thanks to dollar sales by state-run banks, likely on behalf of the Reserve Bank of India (RBI).

Despite significant foreign investor withdrawals from Indian stocks due to upcoming election concerns, the RBI's actions helped maintain the rupee's value. Strong local demand for dollars and a rising dollar index continue to pressure the rupee. Asian currencies, including the Korean won, have weakened due to mixed signals from US inflation data.

Forex investors can expect the rupee to stay within the 83.40-83.55 range until the election results are known.

Dollar rises as US import prices surge

The US dollar strengthened following a 0.9% increase in import prices last month, raising inflation concerns and delaying potential Federal Reserve rate cuts.

April saw the largest import price hike since March 2022, alongside a drop in unemployment claims, indicating a robust labor market. Fed officials stress that inflation hasn't yet reached their 2% target, requiring more time for current policies.

The dollar index rose 0.27%, impacting currencies like the yen and euro. With US inflation at 3%, investor sensitivity to economic data remains high, influencing global currency movements and market reactions.