Persevering with its silde in opposition to the greenback, the rupee ended at a brand new low of 81.67 on Monday resulting from risk-off sentiment amongst buyers following an aggressive fee hike announcement by the US Federal Reserve final week.
The rupee closed 69 paise down in comparison with Friday’s shut of 80.98 in opposition to the dollar.
The weak spot within the rupee additionally affected sentiment of fairness market buyers, because the benchmark Sensex on the BSE tanked 953 factors, or 1.6 per cent, to shut at 57,145.22. The broader Nifty at NSE misplaced 311 factors, or 1.8 per cent, to finish at 17,016 on Monday. International institutional buyers offloaded shares price Rs 5,101.30 crore, as per provisional information from the BSE.
“Rupee falls to recent all-time lows because the greenback strengthens throughout the board. Hawkish Fed outlook, political instability in China and sell-off in pound after the tax reduce announcement can be disturbing the general market sentiment,” Gaurang Somaiya, foreign exchange & bullion analyst, Motilal Oswal Monetary Providers, mentioned.
Final week, Finance Minister Nirmala Sitharaman mentioned the rupee has “held again very well” in opposition to the US greenback when in comparison with different main currencies of the world.
“Because the US Fed’s hawkish rhetoric on the current FOMC and enhance within the terminal fee for this cycle, threat sentiments have weakened significantly, weighing on regional currencies and bonds, complicating policymakers’ inflation struggle. Robust intervention presence had stored the USD/INR in a slender 79-80 vary within the run-up, however the pair has since swiftly risen to file highs above 81,” mentioned Radhika Rao, government director & senior economist, DBS Group Analysis.
In the meantime, as per a Reuters report, Wall Avenue prolonged declines on Monday as buyers continued to stress in regards to the Fed’s aggressive coverage tightening and its impression on the US economic system. As of 12:41 pm ET, the Dow fell 1.06 per cent at 29,275.64, the S&P 500 by 0.99 per cent at 3,656.56 and the Nasdaq by 0.53 per cent at 10,810.87. Europe’s STOXX 600 index slipped to hit a brand new low since December 2020.