Turmoil in emerging markets continues.

The rout in emerging markets has continued today, with the South African rand (EZA) sliding 1.5% at the time of writing, the yield on 10-year government bonds jumping 19.5 bps to 8.09%, and the JSE Top 40 sinking 2.3%. Meanwhile, The Indian rupee (INR) hit a fresh record low of 59 to the dollar and is down by over 7% since the start of May. Elsewhere, Thai shares lost 5.1%, Indonesia 3.5% and the Philippines 4.6%. Worries about the tapering of the Fed's QE and countries' individual problems have combined to cause the losses.

Germany's top court weighs ECB bond buys.

 Germany's Federal Constitutional Court has started a two-day hearing today over the compatibility of the ECB's Outright Monetary Transactions (OMT) program, which allows the bank to buy government bonds in the secondary market, with German law. Lining up against the ECB is Bundesbank chief Jens Weidmann. As with its previous decisions regarding the eurozone, the court is expected to rule for the OMT but attach some strings.

Equities fall on lack of BOJ action.

Japanese and European shares fell while the dollar-yen was -1.8% at the time of writing after the Bank of Japan offered no new stimulus to satiate markets' liquidity habit. U.S. futures were sharply lower as well, while U.S. Treasurys continued to slide, with the 10-year yield up to 2.26%. Hong Kong shares dropped sharply ahead of a holiday tomorrow and the re-opening of mainland Chinese exchanges on Thursday. They've been closed this week and so haven't yet reacted to the weekend's disappointing economic data.

BOJ refrains from adding to stimulus.

As expected, the Bank of Japan has kept its ultra-loose monetary policy unchanged, although it gave a slightly more upbeat outlook for exports and the wider economy. The BOJ also said "some indicators suggest a rise in inflation expectations." Some market participants had hoped that the bank would take action to address bond volatility, such as by lengthening the duration of one-year low-interest loans to banks.

Nifty June Futures - Important Levels for Wednesday, 12.06.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels onLevels on Lower side is 5795-5780.  Below this, next important level is  5760-5740. (This levels, Either Acts as a support while Nifty is moving in downward direction orActs as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels on Levels on Higher Side is 5805-5825.  Above this, next important level is  5840-5865. (This levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Break out Trigger level which fuels further upward movement from here).

 

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Rupee again hits record low; trading below 58.50 vs dollar

The rupee hit a record low on Tuesday, with the absence of RBI intervention prompting importers to rush to cover future dollar needs, while exporters refrained from selling dollars in expectation that the rupee could fall further.

 

The rupee has plunged 2.8 percent so far this week, notching record lows for two consecutive days.

Some analysts believed pressure on the currency intensified after comments on the limitations of currency intervention by Reserve Bank of India Governor Duvvuri Subbarao on Friday.

 

"Fundamentally, INR will continue to depreciate because of CAD (current account deficit), but this move has happened too soon and too fast."

 

Analysts noted that while foreign institutional investors (FIIS) were still net buyers, the risk that they could turn sellers could force the central bank to intervene to at least moderate the volatility.

"The market is in a panic mode. Currently FIIs are still net buyers but if they turn sellers in coming days, in that case only hope will be RBI intervention for stability and with decent reserves, RBI can definitely stabilise volatility,"

The weakness in the rupee has prompted investors to exit their positions in the debt market while the domestic equity market is also under selling pressure.

Traders said a drop in other Asian currencies also hurt sentiment for the rupee.

At 10:15 a.m. (0445 GMT), the partially convertible rupee was at 58.66/67 per dollar, after hitting a life low of 58.7050 and 0.85 percent weaker than its previous close of 58.15/16 on Monday.

The rupee has dropped in 16 of the last 18 trading sessions and is down 8.3 percent since the start of May. The currency is the third-worst performer in Asia in 2013.

Traders will be watchful of any central bank intervention to prevent the rupee from weakening further. An absence of intervention by the central bank could push the rupee down to 59 later in the session, dealers said.

 

 

French industrial production surprises on the upside.

 French industrial output slayed consensus in April, jumping 2.2% on month vs -0.6% in March and forecasts of +0.3%. Production was boosted by strong growth in the manufacture of coke and refined petroleum products (+14.7%), as well as by smaller increases in the transport-equipment industry, and the electrical and electronic equipment sector. In contrast, industrial production in Italy slipped 0.3% vs -0.9% in March.