Millennium Post

Rupee dips to all-time low of 68.865 per $, sensex also takes pounding

Extending its losses against the American currency for the fifth trading day, the Indian rupee dropped by 17 paise to 39-month lows to end at 68.73 per dollar on heavy bouts of month-end dollar demand from importers amid continued foreign capital outflows as well as surging dollar overseas.

The rupee opened lower at 68.74 per dollar as against last yesterday’s closing level of 68.56 at the Interank Foreign Exchange (Forex) market and dropped further to an all- time low of 68.8650 before ending at 39-month closing lows of 68.73 per dollar.

The domestic unit had dropped by 91 paise or 1.34 per cent in five trading days.

The domestic unit was last quoted at 68.85 per dollar during the intra-day and ended 68.80 per dollar on August 28, 2013.

The rupee moved in a range of 68.58 per dollar and 68.8650 per during the day.

Foreign funds offloading liquidity from emerging markets on expection of rate hike next month by the US Federal, also rupee volatility following domestic demonitization drive to curb black money serving intense pressure on rupee’ a dealer said.

The dollar Index was trading lower by 0.20 pct against a basket of six currencies.

In the overses market, the dollar flirted with fresh 13-year highs today before backing down slightly, after solid U.S. economic indicators and Federal Reserve meeting minutes underpinned speculation for an interest-rate rise.

Snapping its two-day rising trend, the Sensex slumped 192 points to finish below the 26,000-level due to profit-booking on the last day of November contracts and a fragile rupee, which hit record low against the dollar.

The Sensex resumed slightly lower at 26,049.14 and dropped further to 25,810.97 before ending at 25,860.17, showing a loss of 191.64 points or 0.74 per cent.

The index had gained 286.67 points or 1.11 per cent in the previous two days.

The NSE 50-share Nifty too dropped by 67.80 points or 0.84 per cent to close below the crucial 8,000-level to 7,965.50.

It had gained 104.20 points or 1.31 per cent in two days.

“Continued weakness in rupee against dollar, last hour of expiry square-off and the disruptions in Rajya Sabha debate over demonetisation dragged the market,” said Vinod Nair, Head of Research, 
Geojit BNP Paribas Financial Services.

Participants offloaded their long bets in futures and options (F&O) segment instead of carrying them forward to the next series for December.

Foreign funds sold shares net Rs 1,023.12 crore yesterday, as per provisional figures issued by the stock exchanges.

Investors fear that upbeat US economic data has strengthened the case for a rate hike in the US, sparking capital outflows from emerging markets.
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