INR spooked by election headlines

By Kenan Machado  @kenanwsj

India’s stocks and currency swung sharply in the first hour of trading, taking attention from strong bank-fueled gains in Japan and Australia and the start of bitcoin trading on the world’s largest futures exchange.

The rupee briefly hit a three-month low versus the dollar and the Sensex stock benchmark in India fell as much as 2.6% as some reports hinted that Prime Minister Narendra Modi’s party may have fallen short in two state elections.

The latest results on India’s election commission website, however, pointed to a lead for Mr. Modi’s Bharatiya Janata Party in both states. The fact that the agency typically updates data with a lag doesn’t help to calm market nerves. But Indian media are now reporting the BJP has won the regional election in Gujarat state.

“It was certainly a wild ride there for a little bit,” said Stephen Innes, head of Asian trading at Oanda. “The initial read was wrong, with news pointing to too tight of an election. That spooked the market initially.”

A loss for the BJP could risk reining in Mr. Modi’s reforms, which have been unpopular at times, said the head of treasury operations at an Indian bank in Hong Kong.

The Wall Street Journal

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes