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After opening the day flat, the Indian share markets registered losses and went on to trade marginally lower. Sectoral indices are trading on a mixed note with information technology (IT) sector stocks and telecom sector stocks witnessing maximum selling pressure.
The BSE Sensex is trading down 80 points (down 0.3%) and the NSE Nifty is trading down 27 points (down 0.3%). The BSE Mid Cap index is trading flat, while the BSE Small Cap index is trading down 0.1%. The rupee is trading at 66.78 to the US$.
In an update from the currency markets, the pound witnessed one of its worst times in history in early Asian trades today. It plunged to hit a new 13-year low against the US dollar. Some suggest it's a flash crash triggered in thin liquidity. Further, French President Francois Hollande's comments that United Kingdom had to suffer the repercussions of its decision to leave the European Union to maintain the fundamental principles of the institution could also have led to the crash.
His comments followed British prime minister Theresa May's speech during the Conservative party's annual conference earlier this week. Theresa May had stated that the U.K. would leave the EU by 2019. May also said that the U.K. would become a "fully independent, sovereign" country, suggesting that a "hard" Brexit was to be expected.
The currency tanked as much as 6% as traders scrambled to assess the cause of the heavy selling. As per the news, it fell to US$1.1819 in early Asian hours, hitting its lowest level since 1985 - a year when it hit US$1.0520. This above fall was also noted as the most aggressive since results of the Brexit vote emerged on June 24. To keep a tab on the movements in the pound and other currencies, you can read the stock market commentary from the Daily Profit Hunter team. Their commentary tracks the developments in the global economy as well as stock, currency and commodity markets.
The above comments have added to the ongoing volatility in the global markets. One can expect further losses on any fresh triggers on these topics.
Asad Dossani, editor, Daily Profit Hunter, is of the opinion that Brexit will never happen. He's written that British politicians are employing standard delay tactics and their aim is to prevent the Brexit from ever taking place. He's also written on how one can successfully trade political events such as Brexit.
In another news update from the global markets, filings for US unemployment benefits fell last week to the second-lowest since 1973. This was seen as employers showed scant willingness to fire workers amid a tightening labor market.
As per the data, jobless claims dropped by 5,000 to 249,000 in the week ended October 1. Also, the continuing claims declined to the lowest level since 2000. Filings were just a hair above the four-decade low of 248,000 from April. All eyes are now set on the US Labor Department's employment report that may encourage the Fed to raise the benchmark rate before the end of the year.
Last month, the US Federal Reserve left interest rates unchanged. However, citing labour market improvements, it strongly signalled that it could still tighten monetary policy by the end of this year. Fed Chair Janet Yellen said she expected one rate increase this year if the job market continued to improve and major new risks did not arise.
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