Rupee crashes to over 2-month low on foreign fund outflowshttps://indianexpress.com/article/business/market/sensex-bse-nse-nifty-stock-market-india-5725847/

Rupee crashes to over 2-month low on foreign fund outflows

Extending losses for the ninth session in a row, the 30-share BSE benchmark Sensex saw steep plunge in the last hour and closed 372.17 points, or 0.99 per cent, lower at 37,090.82.

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The rupee opened sharply lower at 70.16 and fell further to touch over two-month low of 70.53 at the interbank foreign exchange market as oil prices rose over one per cent in global markets.

The rupee on Monday fell sharply by 59 paise to close at a nearly two-and-a-half-month-low of 70.51 against the US currency and the Sensex plunged by 372 points amid persistent foreign fund outflows, renewed worries over trade tensions, crude oil prices and the decline in industrial production growth.

Extending losses for the ninth session in a row, the 30-share BSE benchmark Sensex saw steep plunge in the last hour and closed 372.17 points, or 0.99 per cent, lower at 37,090.82. The index hit an intra-day low of 36,999.84 and a high of 37,583.57. Similarly, the broader NSE Nifty sank 130.70 points or 1.16 per cent to settle at 11,148.20 points. During the day, the NSE gauge hit a low of 11,125.60 and a high of 11,300.20.

The rupee opened sharply lower at 70.16 and fell further to touch over two-month low of 70.53 at the interbank foreign exchange market as oil prices rose over one per cent in global markets. “Indian rupee plunged along with other emerging market currencies amid concerns of a drawn-out trade war. The rise of more than 1.5 per cent in crude prices and heavy selling in domestic equity markets also weighed on the rupee during today’s trade,” said VK Sharma, Head PCG & Capital Markets Strategy, HDFC Securities. Brent crude futures, the global oil benchmark, rose 1.57 per cent to $71.73 per barrel due to simmering tensions in the Middle East.

Explained

Trade tensions drag markets

Weak cues from global markets amid uncertainties around US-China trade tariff deal have put domestic investor sentiments under pressure. Sustained foreign fund outflows along with election worries have also kept investors edgy. Global trade upheaval and economic situation will be a determining factor for the markets, going forward.

In the stock market, Sensex laggards were Yes Bank, Tata Steel and Indusind Bank which fell as much as 5.58 per cent. In percentage terms, however, Sun Pharma was the biggest loser with 9.39 per cent drop. Intra-day, the pharma major’s shares tanked over 20 per cent. Vinod Nair, head of research, Geojit Financial Services, said, “consolidation extended in the market as rising trade tensions and contraction in domestic industrial production dented investor’s sentiment. Additionally, exodus of foreign funds and rising oil prices impacted the currency’s movement. Global economic situation will be a determining factor for the market while investor’s remain focused on Monday’s CPI inflation data to get cues on interest rate trajectory, currently market is expecting reduction in interest rate in the medium-term. “

The Index for Industrial Production (IIP) growth had slipped to a 20-month low of 0.1 per cent in February and had stood at 5.3 per cent in March 2018. Shares of ITC dropped 2.64 per cent. Jet Airways plummeted over 8 per cent Monday amid continued uncertainty over bidders.