The rupee slumped 1.5 per cent against US dollar and the Sensex was down by 521 points or 1.49 per cent at 34,438 on Tuesday morning following the shock exit of former RBI Governor Urjit Patel and amid uncertainty ahead of the Assembly election results of five states — Madhya Pradesh, Telangana, Chhattisgarh, Mizoram and Rajasthan.
The rupee was trading at 72.46 against the US dollar, down 1.5%, as compared to Monday’s close of 71.32. The Nifty too fell by 1.28 per cent or 134.65 points to trade at 10,353.80.
Meanwhile, a day after RBI governor Patel’s resignation, eminent economist and columnist Surjit Bhalla resigned as part-time member of Economic Advisory Council to the Prime Minister (EAC-PM).
Bankers and fund managers are bracing for volatility in the markets on Tuesday. Soon after Patel’s resignation, which came following a months-long fractious faceoff with the government, the Nifty and Sensex had plunged around 2 per cent on Monday to register their worst closing levels in four weeks.
The rupee too slid over 1.1 per cent (72.46 to the US $ at 6.30 IST) in the overseas (Non-Deliverable Forward) market. The Sensex closed at 34,959.72 points, down 713.53 points, while the Nifty closed at 10,488.45, down 205.25 points or 1.92 per cent. Fund managers had predicted on Monday that the resignation would be “taken negatively by the market” on an immediate basis and his replacement would hold the key.
Markets have been volatile this year following rising crude oil prices and depreciation of the value of rupee. The lowest levels for the Sensex and Nifty this year were at 32,483.83 and 9,951.9 on March 23.