Continuing its silde towards the greenback, the rupee ended at a brand new low of 81.67 on Monday resulting from risk-off sentiment amongst traders following an aggressive charge hike announcement by the US Federal Reserve final week.
The rupee closed 69 paise down in comparison with Friday’s shut of 80.98 towards the dollar.
The weak point within the rupee additionally affected sentiment of fairness market traders, 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. Foreign institutional traders offloaded shares value Rs 5,101.30 crore, as per provisional information from the BSE.
“Rupee falls to fresh all-time lows as the dollar strengthens across the board. Hawkish Fed outlook, political instability in China and sell-off in pound after the tax cut announcement is also disturbing the overall market sentiment,” Gaurang Somaiya, foreign exchange & bullion analyst, Motilal Oswal Financial Services, mentioned.
Last week, Finance Minister Nirmala Sitharaman mentioned the rupee has “held back very well” towards the US greenback when in comparison with different main currencies of the world.
“Since the US Fed’s hawkish rhetoric at the recent FOMC and increase in the terminal rate for this cycle, risk sentiments have weakened considerably, weighing on regional currencies and bonds, complicating policymakers’ inflation fight. Strong intervention presence had kept the USD/INR in a narrow 79-80 range in the run-up, but the pair has since swiftly risen to record highs above 81,” mentioned Radhika Rao, government director & senior economist, DBS Group Research.
Meanwhile, as per a Reuters report, Wall Street prolonged declines on Monday as traders continued to stress in regards to the Fed’s aggressive coverage tightening and its influence 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.