USD/TWD ends sharply down sharply at 32.820 vs 32.955 last close in moderate trade on foreign fund inflows, weak USD/KRW, gains in Taiwan shares (Taiex +0.8%), exporters’ month-end selling, says local bank trader. “There were some fund inflows as foreign investors foresee possible future gains in Taiwan shares, but the volume was not heavy as investors are still waiting for second-quarter earnings reports (to be released this week),” she says. Eyes USD/TWD in 32.700-32.850 band tomorrow.
If India’s overall rainfall deficiency falls to 20%-25%, India’s GDP growth could fall to sub-5% this fiscal year, says Mridul Saggar, chief economist at Kotak Securities. India government forecasts FY economic growth of between 6.25% and 7.75%. Meteorological Department forecasts rainfall
in June-September wet season at 93% of long-term average, which not an
unusually large deviation, but distribution so far has been extremely uneven,
with some areas flooded while others parched. After driest June in 83 years, 4 of India’s 28 provinces declared drought. A slump in the agricultural sector
would pressure government to respond with support measures, even as it already struggles with fiscal deficit of 6.8% of GDP. Jahangir Aziz, chief India
economist at JPMorgan, estimates inflation to rise by 2 to 3 percentage points over RBI’s baseline forecast of 4% if monsoon rains don’t pick up.
FTSE stays positive as financials and miners extend gains. Joshua Raymond at City Index notes that since July 13, the FTSE 100 is 12% higher and rallying at an average of 1.2% each day, largely following a pleasing earnings season. Says, “the main positive it shows is [the] growing trust amongst investors that the heavyweight stocks will head in the right direction.” Warns, though, that stock prices could be artificially inflated if companies are beating expectations due to lower expectations, allied with low volumes in equity markets.