The market was expecting the return of Dr Singh or Chidambaram and the Rupee gained to 34.05. The news of a hung parliament and the prospects of Laloo as PM sent shivers through the market and the Rupee weakened. This time round, the market has probably already discounted a hung parliament, and possibly all other likely bad news. Swim with the market after the elections. Overseas Markets Recap JPY hits intermediate target of 122.50, bounces back to 125.51 before closing at 125.15.
Technicals drive the market.
DEM is mixed, trading in a range of 1.8005-1.8275. Closes at 1.8180. GBP first weakens on Technicals and Yen strength to 1.6215 but then gains to 1.6416 on surprisingly hawkish BOE inflation report. Closes at 1.6408. Market prefers to be largely square before the G7 meeting next weekend.