Markets Slide For 7th Day, Rupee Hits Six-Month Low

The sensex on Wednesday plunged a sharp 440 points to close at an over three-month low.

Updated
Business
2 min read
People walk pass the Bombay Stock Exchange (BSE) building displaying India’s benchmark share index on its facade, in Mumbai. Photo used for representational purpose.
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Fortunes soured for stocks for the seventh day in a row as the Sensex on Wednesday plunged a sharp 440 points to close at an over three-month low, triggered by a weakening rupee on concerns that foreign capital will move out sooner than later after Fed Chair Janet Yellen's comments.

Yellen, in a speech, said the US Federal Reserve should stick to gradual rate hikes despite the uncertainty about the inflation trajectory.

This was enough for foreign investors to hit the exit button, looking for instruments that yield better returns. The rupee took a hammering, sinking to over a six-month low of 65.75 against the dollar during the day.

The lingering Korean stand-off dealt a further blow after US President Donald Trump dialled up his threats saying America is "totally prepared" for a "military option" on North Korea, warning that would be "devastating".

Updates of military action on the eastern border hastened the market's fall, which has been on a slippery slope ahead of the derivatives expiry tomorrow.

Clearly, it was downhill drive for the BSE benchmark right in the beginning, which settled lower by 439.95 points, or 1.39 per cent, at 31,159.81.

This is the weakest closing since June 30 when the gauge had settled at 30,921.61. It had lost 824 points in the previous six sessions.

Mood was downcast at the 50-share NSE Nifty too, which after regaining the key 9,900-mark at one stage closed down 135.75 points, or 1.38 per cent, at 9,735.75 -- a level last seen on August 11 when it closed at 9,710.80.

Rupee Hits Sex-Month Low

The rupee continued to bear the brunt of panic dollar demand and plunged by a whopping 27 paise to end at 65.72 a dollar, its lowest level in six-and- a-half months, amid concerns over foreign capital outflows.

This is the lowest level for the home currency since March 14, when it had closed at 65.82 against the greenback.

The rupee has depreciated by sharp 3.04 per cent or 194 paise in last 14 trading sessions after revisiting a fresh one-month high of 63.78 on 8 September.

A massive fall in local equities amid heightened global volatility took its toll on the currency market sentiment as global funds dumped Indian assets amid rising expectations for an imminent US interest rate hike.

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