The rupee tumbled to a record low of 81.62 against the US dollar and the Sensex, the stock market’s bellwether index, sank 953.70 points as various assets continued to be pounded by concerns of a looming recession in advanced economies that have prompted a worldwide hardening of interest rates.
The turmoil in the markets, which began after last Wednesday’s hawkish commentary from the US Federal Reserve, is showing no signs of abating with market pundits fearing that the rupee will continue to be battered in the battered in the medium term amid a continuous outflow of capital from emerging markets.
As a result, the US dollar has gained against several currencies, including the rupee. An indication of its global strength is being reflected in the Dollar Index (DXY) which vaulted to a new 20-year high of 114.53 in early trades today.
The DXY gauges the greenback’s strength against a basket of six currencies. The rupee opened below the 81 mark at 81.53 to the greenback and hit a day’s low of 81.67 against the US unit. It closed the day 63 paise lower at 81.62 as compared with Friday’s close of 80.99. Market circles said the RBI had intervened aggressively in the market but failed to stem the slide.
Equities were also under pressure at the start of the week, taking their cues from global markets. The Sensex opened sharply lower at 57525.03 before plunging to the day’s low of 57038.24, a fall of 1060 points. The index closed at 57145.22, showing a fall of 953.70 points. Similarly, the NSE Nifty fell 311.05 points or 1.80 per cent to 17016.30.
Strong market debut
There was some cheer for investors who had subscribed to the IPO of Harsha Engineers International. The scrip listed Rs 444 per share on BSE and Rs 450 per share on NSE, at a premium of 34.55 per cent and 36.36 per cent, respectively, to the issue price of Rs 330 per share.