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The Indian rupee is expected to remain sideways on Friday amid falling crude prices, risk aversion in global equity markets, and a strong dollar. The USDINR pair is having resistance at 79.90 and 80.15, while the support has shifted to 79.40 from 79.05, according to analysts. In the previous session, the rupee declined due to strong demand for the U.S. dollar from oil companies, while markets braced for a big rate hike from the U.S. Federal Reserve next week. A firm American currency and a negative trend in domestic equities weighed on the currency. At the interbank foreign exchange market, the local unit opened at 79.53 per dollar, and settled at 79.73, down 21 paise over its previous close.

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services

“Rupee on Thursday consolidated in a narrow a range and volatility remained low even after inflation number from the US and the UK came above estimates. The dollar was slightly higher following data showing U.S. retail sales unexpectedly rebounded in August. But gains for the dollar were restricted as data for July was revised downward to show retail sales declining instead of flat as previously reported. The greenback has been supported by the view that the Fed will keep tightening policy aggressively.”

“Yen was under pressure after a record Japanese trade deficit for August. The yen’s fall by nearly 20% over the past six months added to higher import costs, aggravating already high costs of energy and raw materials. The market remains choppy knowing that there’s a Fed meeting next week. Even though market participants agree that there could be a 75 basis points rate hike, it’s what the statement adds to previous commentary and what Chairman Powell says in his press conference. We expect the USDINR(Spot) to trade sideways and quote in the range of 79.40 and 80.05.”

Dilip Parmar, Research Analyst, HDFC Securities

“The Indian Rupee could fall lower following a weak handover from overseas. Overnight, we have seen risk-averse moods after mix bag of US economic data that backed the view of hawkish monetary policy. US Swaps traders are currently pricing in a 75 basis-point hike when the Fed meets next week. The weakness in the Chinese yuan which crosses the 7 could also weigh on other regional currencies.”

“Asian stocks headed for the fifth week of declines following more weakness in US equities and a surge in short-end Treasury yields that reflects expectations for outsized Federal Reserve interest rate hikes. On Thursday, spot USDINR gained 26 paise to 0.33% to 79.79 and heads for the first weekly gain after two weeks of fall. The technical set-up turned bullish after the past two days of price action. The pair is having resistance at 79.90 and 80.15 while the support has been shifted to 79.40 from 79.05.”

Amit Pabari, MD, CR Forex Advisors

“Inflation in the US and its strong consumer and labor markets are backing the Fed’s aggressive rate hike decision in the upcoming policy meeting on 21st September. Markets have priced in fully the chance of an increase of 0.75 bps while the 30% see an increase of 1 full percentage rate hike as of today, all of which is supporting the strength in the US dollar and shot the US 10Y yields to a 52-week high yesterday. Here, the recent sharp appreciation in rupee near 79.00 levels has been quickly washed off for it to trade again back to near 79.80 levels.”

“It could be the influence of the strong dollar, weaker sentiments, or weakening of the Chinese Yuan past 7.00 all negative factors weighing on the rupee. The next move toward 79.95 and 80.10 is basically the RBI’s play as one needs to be cautious of the central bank intervention from the past two times. For now, the level of 80.10 remains a strong resistance for the USDINR pair, which hasn’t been able to breach multiple times in the past though however posed the rest of the currencies are. Breaking 80.10 could invite another upside move of 50 paise to 1 rupee. On the flip side, 79.00 remains strong support for the pair.”

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India’s procurement of Russian crude oil is not under any government-to-government framework and Indian entities make the purchase from the market to respond to the country’s energy security requirement, Foreign Secretary Vinay Kwatra said on Thursday.

Kwatra also chose not to comment on the proposed price cap on Russian oil, a move initiated by the G7 countries to choke Moscow’s oil revenue.

The G7 countries are reportedly seeking India’s support to enforce the price cap on Russian oil.

The comments by Kwatra came at a media briefing on Prime Minister Narendra Modi’s visit to Uzbekistan to attend the SCO summit.

Modi is set to meet Russian President Vladimir Putin on the sidelines of the Shanghai Cooperation Organisation summit (SCO) summit. India’s procurement of discounted crude oil from Russia has seen a significant jump in the last few months notwithstanding an increasing disquiet over it by the Western countries.

“India is not a member of the G7. Deeper discounts, market pricing.. look, we have said several times that when the Indian entities go out and try to respond to India’s energy security needs and procure oil, they essentially procure it from the market,” Kwatra said.

He was responding to a question on the issue.

“These are not government-to-government purchases that we do. On the price cap coalition, what form it takes, what shape it evolves into, I think the countries that floated that idea perhaps can better answer to it,” he said.
India’s crude oil imports from Russia have jumped over 50 times since April and now it makes up for 10 percent of all crude bought from overseas.

Russian oil made up for just 0.2 percent of all oil imported by India prior to the Ukraine war.

The Western countries are gradually bringing down their energy purchases from Russia following its attack on Ukraine.

The G7 comprised Japan, the UK, the US, Canada, France, Germany, and Italy.

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices in India were trading lower on Tuesday, and yellow metal firmed up globally. On Multi Commodity Exchange, gold October futures were ruling Rs 276 or 0.6 percent down at Rs 50,355 per 10 gram, as against the previous close of Rs 50,631. Silver December futures were trading Rs 463 or 0.8 percent down at Rs 57,028 per kg. Globally, yellow metal prices held firm near a two-week high hit in the previous session, helped by a subdued dollar, while investors awaited U.S. inflation data that could provide cues on the Federal Reserve’s interest rate hike path, according to Reuters. Spot gold rose 0.1% to $1,725.70 per ounce, and US gold futures were down 0.2% at $1,736.80.

Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

Gold prices held firm after a rally witnessed in the past few sessions, hovering near a two-week high, helped by a subdued dollar, while investors awaited U.S. inflation data that could provide cues on the Federal Reserve’s interest rate hike path. As the Dollar Index and U.S. Yields witnessed pressure in the earlier session and a rally was witnessed in both gold and silver prices. Although some profit booking could be on cards after a much-awaited upside by market participants. According to the CME fed watch tool there is a 90% probability for one more 75bps rate hike to combat inflation. Germany’s economy, Europe’s largest, will contract next year as a dramatic rise in energy costs due to the war in Ukraine extinguishes the chances of recovery after pandemic-related lockdowns, the Ifo institute said. Focus today will be on U.S. consumer price data, where the expectation is that headline inflation could rise by 8.1% YoY in August versus 8.5% in July. The broader trend on COMEX could be in the range of $1700-1750 and on the domestic front prices could hover in the range of Rs. 50,150- 50,870.

Bhavik Patel, Commodity & Currency analyst, Tradebulls Securities

Gold had recovered somewhat after both US Treasury securities and the Dollar index softened from $110.23 to $108.18 in a couple of trading sessions. Today’s US CPI will guide gold movement further although a 75bps rate hike on 21st Sept is already factored in by the market. Until now hedge funds had increased their long positions in USD and profit taking was due which would short squeeze precious metals and that is what is happening right now where the silver market rallied 6% at the start of the week as there were heavy shorts in that counter (bearish bets was at 3 years high). Nothing has changed fundamentally and the global backdrop continues to favor the dollar and U.S. assets in general. We believe any confirmed trend will only emerge after the US Fed meeting where the Fed will give further ideas about raising interest rates. MCX 50780 is proving to be strong resistance as in the past three trading sessions, gold has reversed from that zone. So go long only above that level.

Tapan Patel, Senior Analyst – Commodities, HDFC Securities

Gold prices held steady on Tuesday with spot gold prices at COMEX trading near $1722 per ounce in the morning trade. MCX Gold October futures opened lower near Rs. 50424 following a stronger rupee. Gold prices are trading firm supported by a weaker dollar as market players are awaiting key US CPI data. We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1710 and resistance at $1740 per ounce. MCX Gold October support lies at Rs. 50200 and resistance at Rs. 50800 per 10 gram.

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Shares of Mahindra Lifespace Developers touched their 52-week high in the morning trade on Monday after the realty firm said it is looking to acquire a few land parcels this fiscal to build housing projects. Shares of the company opened at Rs 541.95 on Monday, then gained 2.37 percent to touch Rs 550.40, its 52-week high level on the BSE. A similar movement was seen on the NSE as well. The stock opened at Rs 539 and later touched its 52-week high of Rs 539.30 apiece.

The company’s Managing Director and Chief Executive Officer Arvind Subramanian have said it is looking to acquire new land parcels for business expansion in three focus cities — Mumbai Metropolitan Region (MMR), Pune, and Bengaluru.

He highlighted that the company already acquired a land parcel this fiscal that has a Gross Development Value (GDV) of Rs 1,700 crore and the deal pipelines are strong. In terms of the GDV, he said the new land acquisition should be in the Rs 3,000-4,000 crore range and the company was well above the guidance in creating new business development opportunities.

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The government on Wednesday set a food grain production target of 328 million tonnes (mt) for the 2022-23 crop year (July-June) which is 4% more than a record foodgrain output of 315.7 mt in the previous year.

Out of the total grain production, rabi crops such as wheat, mustard, and chana (gram) would contribute 164.8 mt in the 2022-23 crop year. Rabi crops are sown in the winter months of December-January and harvested from April onwards.

The government has a set target for higher food grains production for 2022-23 despite a marginal 1.2% decline in the area under all Kharif crops – paddy, pulses, oilseeds, cotton, and Nutri-cereals, etc -to 106.9 million hectares (MH) till last week. Ppaddy sowing area across the country was reported at 38.3 mh which was 5.6% less than a year ago.

“The strategies would be to enhance the area through inter-cropping, crop diversification, and productivity enhancement by introducing high yield varieties, adoption of suitable agronomic practices in low yielding regions, utilizing residual moisture, early sowing and lifesaving irrigation for rabi crops,” an agriculture ministry statement stated after the inauguration of the national conference on agriculture for rabi campaign-2022.

It noted that the priority of the government is on agroecological based crop planning for diversion of land from excess commodities like rice and wheat to deficit commodities like oilseeds and pulses and high-value export earning crops.

Last month, the government estimated overall foodgrain output in the 2021-22 crop year (July-June) had hit a record 315.7 mt, buoyed by a record rice harvest of 130.2 mt. Wheat production has dropped almost 3% to 106.84 mt.

The drop in wheat output is attributed to the heat wave between March and June that hit the crop in the northern states of Punjab and Haryana. This eventually forced the government to impose a ban on wheat exports in May to keep local supplies steady. Trade sources believe the actual wheat output could have been below 100 mt.

According to trade estimates, rice production in the next crop year (2022-23) could decline by around 6 – 10 mt because of the fall in paddy acreage in the current Kharif sowing so far because of deficiency in monsoon rainfall in key growing states of West Bengal, Bihar, Jharkhand, and Uttar Pradesh.

Record production is estimated for crops such as rice, maize, gram (chana), pulses, rapeseed and mustard, oilseeds, and sugarcane for the 2021-22 crop year, agriculture and farmers welfare minister Narendra Singh Tomar said.

In a major boost to reducing import dependence, pulse output rose by close to 27.69 mt in the 2021-22 crop year compared to 25.46 mt estimated in the previous crop year.

The output of coarse cereals such as barley, bajra, maize, and ragi is estimated to decline to 50.90 mt from 51.32 mt reported in the previous crop year.

According to the agriculture ministry, in the non-food grain category, oilseeds output rose more than 4% to 37.7 mt in the 2021-22 crop year compared to the previous year. Rapeseed/mustard seed production is estimated at a record 11.74 mt, which was 15% more than the 2020-21 crop year.

Soybean output rose by 3% to 12.99 mt compared to the previous year. India imports about 56% of its edible oil requirement.

Sugarcane production in the 2021-22 crop is estimated at a record 431.8 mt compared to 405.39 mt in the previous year while cotton output is expected to drop to 31.2 million bales (170 kg each) from 35.24 million bales.

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