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16 May 2014
Asia EM Express: Sensex, rupee soar as early election results in India point to BJP victory
FXStreet (Łódź) - Market attention will be focused today on the outcome of the Indian elections, as the final results are to be announced in Mumbai at midday. According to the latest reports, the pro-business National Democratic Alliance coalition led by Narendra Modi's Bharatiya Janata Party has already won 328 out of 543 seats.
Sonal Varma and Aman Mohunta from Nomura believe that “a Narendra Modi-led NDA government is likely to get more than 300 seats, with the BJP likely to get a simple majority on its own (272 seats required of 543 seats in lower house of parliament).”
“No party has managed to achieve a simple majority in a general election since 1984, and if the BJP is able to cross the 272 mark, it would give it much more headroom to carry out some tough reforms.”
The BSE Sensex and the NSE Nifty indexes rose to new record highs of 25,359 and 7,545 points, respectively, on the news that the Bharatiya Janata Party was heading for an outright majority.
Economic data
China's FDI (Foreign Direct Investment), released on Friday by the Ministry of Commerce of the People’s Republic of China showed a 5% increase in March, down from the 5.5% rise recorded the previous month.
The Indian M3 Money Supply rose by 13.6%, following 13.9% growth.
Later today Malaysian GDP data will be released and Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities notes that “consensus is looking for a faster expansion of economic activity at 5.7% Y/Y, up from 5.1% in the prior quarter.”
“However, following a streak of upside surprises in the EM world—albeit mostly located in EMEA—and particularly weak numbers in the previous quarter, we look for a rebound above consensus led by the manufacturing sector,” he adds.
Hong Kong will also publish Q1 GDP data which is expected to come in at +0.5% quarter-over quarter, following the 1.1% rise in Q4.
Technicals
The Indian currency also hit a fresh 10-mth high on Friday against the greenback, climbing 41 paise to 58.88. Yesterday it gained 39 paise to 59.29.
On Thursday the USD/INR daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 31 at the last close, and has climbed to 40 so far today. Daily 2-StDev Volatility Bandwidth was expanding at 4698 pips, with ATR (14) expanding at 4175 pips. The 1D 200 SMA was at 61.9449, while the 1D 20 EMA was at 60.0675.
Sonal Varma and Aman Mohunta from Nomura believe that “a Narendra Modi-led NDA government is likely to get more than 300 seats, with the BJP likely to get a simple majority on its own (272 seats required of 543 seats in lower house of parliament).”
“No party has managed to achieve a simple majority in a general election since 1984, and if the BJP is able to cross the 272 mark, it would give it much more headroom to carry out some tough reforms.”
The BSE Sensex and the NSE Nifty indexes rose to new record highs of 25,359 and 7,545 points, respectively, on the news that the Bharatiya Janata Party was heading for an outright majority.
Economic data
China's FDI (Foreign Direct Investment), released on Friday by the Ministry of Commerce of the People’s Republic of China showed a 5% increase in March, down from the 5.5% rise recorded the previous month.
The Indian M3 Money Supply rose by 13.6%, following 13.9% growth.
Later today Malaysian GDP data will be released and Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities notes that “consensus is looking for a faster expansion of economic activity at 5.7% Y/Y, up from 5.1% in the prior quarter.”
“However, following a streak of upside surprises in the EM world—albeit mostly located in EMEA—and particularly weak numbers in the previous quarter, we look for a rebound above consensus led by the manufacturing sector,” he adds.
Hong Kong will also publish Q1 GDP data which is expected to come in at +0.5% quarter-over quarter, following the 1.1% rise in Q4.
Technicals
The Indian currency also hit a fresh 10-mth high on Friday against the greenback, climbing 41 paise to 58.88. Yesterday it gained 39 paise to 59.29.
On Thursday the USD/INR daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 31 at the last close, and has climbed to 40 so far today. Daily 2-StDev Volatility Bandwidth was expanding at 4698 pips, with ATR (14) expanding at 4175 pips. The 1D 200 SMA was at 61.9449, while the 1D 20 EMA was at 60.0675.