Rupee Hits All-Time Low; Decline After 4-Day Gains

Indian stock indices, after having extended gains for the fourth straight session till the previous session, fell marginally on Thursday morning, tracking overnight weak sentiments from US markets.

Also, foreign capital outflows, widening current account deficit, and tightening monetary policy globally to tame inflation were some of the concerns among the investors’ community, analysts said.
At 9.56 am, Sensex traded at 58,962.18 points, down 145.01 points or 0.25 percent, whereas Nifty traded at 17,468.35 points, down 43.90 points or 0.25 percent.

“Sustained flows into mutual funds, particularly via the SIP route, is a major factor imparting strength to the market even in the context of negative global economic news. So long as DIIs are flush with funds markets are unlikely to correct sharply. Fundamental support to the market is coming from the good Q2 numbers, particularly from financials,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Meanwhile, the Indian rupee fell below 83 versus the US dollar for the first time on Wednesday as the US dollar continued to strengthen. The rupee plunged 61 points and closed at a record low of 83.01 against the dollar.

This morning, it opened near its record low.

Meanwhile, India’s forex reserves had dropped significantly, which is currently at a two-year low, because of RBI’s likely intervention in the market to defend the depreciating rupee.

Typically, the RBI intervenes in the market through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee. (ANI)

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