MUMBAI, Aug 18: The devaluation of the Russian rouble and continuing unstable conditions in other Asian markets continued to create tremors on the Indian stock and currency markets. While the rupee sank to an all-time low of 43.35/38 against the US dollar, Sensex breached the 2,900 mark to close at a new 20-month low of 2,867.99 points registering a net loss of 49.08.Opening steady at 43.18/21, the rupee moved downwards on continued dollar demand by corporates and banks and closed at a new record low of 43.35/38, against the previous close of 43.17/18, losing its value by about 19 paise.The rupee's fall on Tuesday was triggered by the finance minister's statements late on Monday that Indian stock and currency markets would be affected by international developments, dealers said. ``Finance Minister's statement to have knee-jerk reaction and cannot rule out a move towards 43.45 but that should hold and advise not to panic," said a private bank's market commentary. Sinha had said Russia was an importanttrading partner and any devaluation of their currency was bound to have an impact on India.Regional markets extended losses on Tuesday after a Russian ratings downgrade and its decision to lower the rouble's trading band on Monday. Dealers said market players were also worried about the impact of floods on the Chinese economy and its currency.``Import hedging, especially in far-forwards, was driving forward dollar premiums higher on Tuesday,'' dealers said. The six-month forward dollar premium was at an annualised 8.93 percent against the previous close of 8.46. Dealers said there was some receiving (selling dollars in swap market) in near-term premiums since there were arbitrage opportunities between the money and foreign exchange markets.``It is a good sign that the rupee has not breached 43.40 this week, probably we will see some consolidation in this area," said the head of treasury of a large steel company. The market situation was now similar to the early 1990 swhen it was profitable to keepimports covered and exports unhedged, he said.On the Bombay Stock Exchange, Sensex breached the 2,900 mark to close at a new 20-month low of 2,867.99 points registering a net loss of 49.08. The S&P CNX Nifty index of the National Stock Exchange also recorded a historic low of 831.10, before closing at 832.45 points registering a net fall of 22.10 points.``Fears of the devaluation of the currency seem to have unnerved the operators on the Indian bourses,'' explained a BSE broker in the light of the anticipation of a further fall in the values of the local as well as the Chinese currency.Marketmen said devaluation of the Russian rouble, instability in the South-east Asian currencies and apprehensions of a depreciation in China's yuan could hit Indian exports hard. Several pivotals such as pharma declined sharply on fears of possible fallout of the rouble's devaluation on their trade. Besides these scrips, MTNL, SBI, Colgate, BHEL and others also came under heavy selling pressure.Brokers said thatthe market is already passing through a bearish phase due to the fluid political situation in wake of various issues and the fresh developments affected the sentiment further. ``The political uncertainty at the centre has prompted FIIs to be cautious in extending fresh commitments. Speculators who blindly follow FIIs have turned sellers,'' said a broker.
