Rupee weakens to 13-month low of 63.64, Sensex falls

The rupee had appreciated when BJP came to power, hitting a level of 58.29 on May 22, 2014.

By: Express News Service | New Delhi | Published:December 16, 2014 9:22 pm

The rupee weakened almost 50 paisa or 0.7 per cent against the dollar to close at a 13-month low of 63.64, following a weak trade deficit data that widened to an 18-month high of $16.8 billion on account of a six-fold jump in gold imports.

The rupee had appreciated when the Narendra Modi-led government came to power, hitting a level of 58.29 on May 22 after the election results were announced. However, it has weakened over the last few months and fallen by 8.4 per cent since May 26, when Modi was sworn-in as Prime Minister.

A weakness in rupee along with falling crude prices (that closed below $60 per barrel mark) and concerns over growth in China and other European markets impacted the stock markets, which witnessed a sharp decline on Tuesday in line with correction in other Asian and European markets.

The benchmark Sensex at the Bombay Stock Exchange fell sharply to register its biggest fall in absolute numbers in over 15 months. It fell 538 points or 1.97 per cent to close at a seven-week low of 26,781, taking the total fall in Sensex over the last 10 trading sessions to 1,676 points or 5.9 per cent. The broader Nifty at the National Stock Exchange lost 1.85 per cent to close at 8,067.6.

The foreign institutional investors sold a net of Rs 1,247 crore in the Indian equities on Tuesday, leading a broad correction in the market.
The fall was even more pronounced in the mid cap and the small cap indices at BSE, which fell by 3 and 3.4 per cent respectively during the day.

Slipping crude prices and dip in China’s Purchasing Manager’s Index (PMI) raised economic growth concerns around the world, pushing the global markets in a tizzy. “Concerns over Russian Ruble also played a role in the dip in currency and markets,” said C J George, MD of Geojit BNP Paribas Financial Services.

Among the Asian markets, except for China where Shanghai Composite was up by 2.3 per cent, all other major indices closed in the red. The Hang Seng and Nikkei 225 fell by 2.3 and 2 per cent respectively. Among the European markets, the premier indices in France and Germany were down by 1.5 and 0.7 per cent respectively and FTSE in UK was down by 0.2 per cent.

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