The rupee traded below the psychological 68 per dollar mark to hit a 29-month low following sharp selloff in domestic stocks.
The rupee traded below the psychological 68 per dollar mark to hit a 29-month low following sharp selloff in domestic stocks. The benchmark Sensex was down nearly 500-point loss, trading below the key 24,000 for first time since May 16, 2014. The broader Nifty traded below the key 7,300 mark.
Here are the latest developments:
1) The rupee is trading near record lows hit in September 4, 2013, when India was facing a crisis-like situation amid high deficit and sluggish growth. On Wednesday, the rupee slipped 41 paise to hit an intraday low of 68.06 per dollar.
2) The weakness in the rupee is being attributed to the relentless selling in stock markets. Indian stock markets have fallen 6.5 per cent in just three weeks of 2016.
3) Chintan Haria, fund manager of ICICI Prudential Mutual Fund told NDTV Profit that the fall in domestic stock markets is more to do with global sentiments.
"Both India's macro and micro are in great shape. There is a stress on earnings, but we expect the earnings to improve in the next 2-3 years over government spending," he said.
4) There Sensex and Nifty were hit by selloff across Asia. Major indices in Hong Kong, Japan and South Korea traded 2-4 per cent lower.
5) The continued slide in oil prices has been cited as a big reason for the crack in Asian markets today. Crude prices hit new 12-year lows below $28 a barrel on Wednesday following the International Energy Agency's warning about "oversupply" in oil markets.
6) Falling crude weighed on domestic oil producer Cairn India. The stock traded 5 per cent lower. State-run explorer ONGC slipped 3 per cent.
7) Concerns about a hard landing in China, where annual growth hit a 25-year low, also hit global sentiments, traders said. The benchmark Shanghai Composite and the CSI300 index of the largest listed companies in Shanghai and Shenzhen traded 1-2 per cent down.
8) China isn't buying as many commodities as it once did, hurting exporters in many countries including India. The slowdown in China has hit metal stocks such as Vedanta - down 7 per cent - and Tata Steel, which tumbled over 3 per cent today.
9) Continued selling by foreign investors has been a big factor for the slump in domestic equity markets; foreign institutional investors have sold equities worth more than Rs 2,000 crore in the previous two sessions. So far, they have sold shares worth nearly $1 billion in the first three weeks of 2016.
10) Among domestic factors, the continued contraction in topline growth at top Indian companies has hit sentiments. However, the December quarter has begun on an auspicious note. Big companies such as Infosys and Reliance Industries have surpassed earnings expectations. Contraction in merchandise exports, lumpy industrial growth and rising bad loans are some other negatives that have weighed on stock markets, traders say
.Source - profit.ndtv