Indian equities declined as the rupee fell to a new low against the dollar on Friday. Even as benchmark indices managed to end the week in the green,the BSE Sensex closed below the psychological 17,000 mark.
The rupee touched a record low of 57.32 against the dollar,a fall of more than a rupee since Thursday. The lack of monetary easing from the US Federal Reserve has triggered a run for the US dollar,and selling in equities and commodities globally, said Anindya Banerjee,senior manager,currency derivatives research desk,Kotak Securities.
Earlier in the week,the RBI maintained a status quo on interest rates,triggering a steep correction in the market. Indias economy grew 5.3 per cent in the March quarter over the same period the previous year,the least in nine years,which had triggered hopes of a rate cut.
Earlier this month,the Peoples Bank of China had cut its interest rate for the first time since 2008. The benchmark indices rose 0.1 per cent in the week.
On Friday,most of the key indices in Asia Pacific ended in the red. The Hang Seng and Shanghai Composite indices closed lower by 1.4 per cent each. The Kospi declined the most at 2.21 per cent.
Moodys downgraded the ratings of the worlds 15 biggest banks including Bank of America,JP Morgan and Goldman Sachs,saying they have significant exposure to volatility and capital market risks.