Rupee dips to six-month low

Mumbai: While the equity markets showed some sign of stability and ended the day on a flat note, the India rupee remained weak hitting a six-month low against the US dollar on Tuesday as the geo-political tension in the Korean peninsula and growth concerns in the domestic economy impacted sentiments. 

Along with the weak macro-economic factors, forex participants said that the heavy selling by FPIs in the equity markets is also putting additional pressure on the local currency. Extending its fall for the fourth consecutive session, the rupee closed at a six-month low of 65.45 against the US dollar as compared to its previous sessions close of 65.10 per dollar. 

Meanwhile, the equity markets arrested their steep downtrend with the Nifty recovering from its day’s low of 9,813 to end the session at 9,871.50, posting a marginal loss of 1.10 points or 0.01 per cent.

Similarly, the 30-share BSE Sensex recouped most of its intra-day losses to end the day at 31,599.76, down 26.87 points or 0.08 per cent. According to the provisional data released, FPIs offloaded equities worth Rs 1,915.54 crore. Analysts at ICICI Securities pointed out several global as well as domestic factors that have adversely impacted market sentiments. 

“US Fed’s hawkish monetary policy stance and decision to begin its balance sheet reduction program in October 2017 along with rising geopolitical risks coincided with other domestic challenges for Indian equities. They include fears of combined fiscal slippage due to the state farm loan waivers, uncertainty in achieving budget revenue targets, proposed fiscal stimulus by the central government, sharp depreciation in rupee and spike in bond yields, rise in current account deficit and slowing GDP growth,” ICICI Securities said in its India strategy report.