Nifty 50 fell 157.1 points to 22,363 on Monday, 12 October, on the rupee's best day in six months. India's 10-year borrowing rate hit a three-year high, Brent crossed $106 and foreign funds sold ₹1,708 crore of shares.
OIL - Brent crude is about $106.9 a barrel, up 2.1% from Friday's $104.72. Over the weekend, there were attacks on Riyadh airport in Saudi Arabia and on oil tankers near the Strait of Hormuz. → India buys most of its oil from abroad. When oil costs more, our import bill goes up.
RUPEE - One dollar now costs ₹95.75, down from ₹96.71 on Friday. That is the rupee's best single day since 2 April. On Saturday, the RBI made it harder to bet on the rupee falling and set up a separate dollar window for oil companies. → The rupee got stronger because fewer people were rushing to buy dollars.
INTEREST RATES - The Indian government now pays 7.36% a year to borrow money for 10 years. That is the highest in more than three years. → When a safe government bond pays 7.36%, shares have to offer more than that to attract money.
WHO BOUGHT, WHO SOLD - Foreign funds sold ₹1,708 crore of Indian shares. Indian funds bought ₹3,045 crore. → Indian funds bought more than foreigners sold, and the market still closed lower.
THE MARKET - Nifty 22,363 (-0.70%). Bank Nifty 54,918 (-0.61%). India VIX, the fear gauge, 15.25 (+6.1%). Nifty opened at 22,593 and closed 230 points lower. The last time it closed below today's level was 8 October. Of the 50 Nifty stocks, 43 closed below their 60-day average and 7 above.
WHAT ROSE, WHAT FELL - Best: Media +4.6%, Capital Markets +1.5%, Defence +1.3%. Worst: FMCG -1.7%, PSU Banks -1.2%, Infra -0.9%.
GOLD AND SILVER - Gold ₹1,49,670 per 10 g (-1.0%). Silver ₹2,23,624 per kg (-0.4%). → Gold fell along with shares today.
WORLD - US markets rose on Friday: S&P 500 +0.85%, Nasdaq +0.81%. Europe was up 0.6% this evening. Japan was closed for a holiday. → The rest of the world was not selling. India's fall came from oil and our own interest rates.
PRICES IN INDIA - Retail inflation for September was 5.54%, up from 4.83% in August. Food prices rose 7.74%, up from 5.97%. (This was released at 4 pm, after the market closed.)
THIS WEEK - 13 Oct: the RBI sells ₹25,000 crore of government bonds. 16 Oct: banks must keep more cash with the RBI every day.
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Today's lesson
The rupee had its best day since April. Nifty still closed 230 points below where it opened.
A stronger rupee pulls money into India. A government paying 7.36% to borrow pulls money the other way.
In the last 125 days that Nifty opened higher, it closed below the previous day's close 34 times, like today. The other 91 times, it did not. The opening price is what people hoped. The closing price is what happened.