Indian rupee all set to hit shocking 73 mark against dollar
Both the Sensex and Nifty fell on Tuesday for the second day as crude prices rose and rupee fell.
The escalating trade war is pushing stock markets and rupee deep into nervousness. Both the Sensex and Nifty fell on Tuesday for the second day as crude prices rose and rupee fell. Investor sentiment was dampened after the US announced the further imposition of new tariffs on an additional $200 billion worth imports from China on Monday, escalating the trade war. China, in turn, retaliated with a duty hike on $60 billion of the US imports.
The rupee fell 46 paise and closed at a lifetime low of 72.97 against the US dollar from the previous close of 72.50 on Monday. Panic dollar demand from the importers and speculative traders sent the domestic currency sinking to a historic low of 72.99 in late afternoon deals with very little chance of the Reserve Bank of India (RBI) intervention. The benchmark 10-year government bond rose 8.14%.
Sensex plunged 294.84 points, or 0.78%, closing at a one-month low of 37290.67. The broader Nifty slipped the 11300 mark and settled at 11278.90 tanking 98.85 points, or 0.87%. Though the indices started the day positively, heavy selling in the financial and auto stocks changed the action.
“Selling pressure increased on the bourses due to a spike in oil prices led by factors like the implication of the US sanction on Iran and supply constraints. Domestic triggers failed to add momentum despite fall in inflation, government policies to contain current account deficit (CAD) and consolidation in PSUs. This situation will ease once the global bond and currency market stabilise which is currently under pressure given the chaos over oil and Fed rate hike,” Vinod Nair, head of research at Geojit Financial Services said.
Investors have lost Rs 2.72 lakh crore in two days of market fall. Sensex fell almost 800 points in two days.
“Its everything negative for the markets. Nifty one-and-a-half month low on Tuesday. We will see more 600-700 points correction in Sensex,” said Chandan Taparia, derivatives and technical analyst at Motilal Oswal Financial Services. He said Nifty will trade in the 11171-11250 zone in the coming days.
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SBI, Tata Motors, Bajaj Auto, Axis Bank and Tata Motors were the worst performing scrips on Sensex shredding as much as 4.06%.
Source: DNA Money