Daily Market Report: Wednesday - November 7, 2012

The Indian Rupee opened at 54.25 levels after closing yesterday at 54.43 levels. The Intraday range for the rupee is expected between 54.15 - 54.50 levels.

The finance Ministry officials said the government was working on a number of new economic Reforms. He mentioned overseas borrowings and the corporate bond market as Areas being looked at. They have also indicated that they will be announcing policies every fortnight.

The Asian shares were steady today as investors hoped for a decisive result of the U.S. presidential election, with early counting underway and voting continuing which will decide the outcome.

Aside from the U.S. election, markets will also have an eye on Greece, as the parliament later on Wednesday votes on 13.5 billion Euros of fresh spending cuts and tax hikes. The austerity measures are crucial to unlocking 31.5 billion Euros in aid from global lenders to keep the debt-laden country upbeat.

The US 10 year treasury is trading at 1.68% 3 bps down from 1.71% seen in the earlier session. India's benchmark 10-year bond yield ended down 1 bp at 8.18% on hopes that any extra borrowing by the government will be funded by Treasury bills.

Outlook: Exporters can sell near 54.80-90 levels only for long term partially (8-12 months only). The rupee is expected to be weak with some dips in between . Uncovered Importers can cover around 54.00 - 54.10 levels and keep a stop loss of 54.40 levels. Overall USD/INR pair bullish as per our expectations.

(Source: Corporate Communications Team, India Forex Advisors Pvt. Ltd.)