There was no respite for both the rupee and the equity markets.
The fall of the rupee continued unabated on Monday for a second consecutive day. This spooked the markets. .
The rupee hit yet another historic low, breaching the 63 to the dollar mark, on fears the central bank may announce further liquidity tightening measures to prop up the domestic currency.
Falling over 1.7 per cent during the day, the rupee hit an intraday low of 63.30 against the dollar. The rupee closed at a record low of 63.13 against the greenback due to heavy capital outflows from the domestic equity market. The rupee has fallen about 5 per cent this month.
In a highly volatile trading session, both the BSE Sensex and the NSE’s Nifty closed deep in the red. While the Sensex closed at Rs 18,397, down 290 points or 1.5 per cent, Nifty closed at 5,415, down 93 points or 1.6 per cent. With today’s fall, the BSE Sensex has lost more than 1,000 points in the last two trading sessions. Foreign institutional investors pulled out Rs 680 crore in today’s trade.
The market breadth on Monday remained negative with 1,394 stocks declining against 894 stocks advancing.
Sudip Bandyopadhyay, MD and CEO, Destimoney Securities, said: “Unless the free fall in the rupee is stopped, the stock market will be moving in one direction only. Today, the rupee has reached 63 level, what assurance do we have that it won’t hit 65 tomorrow? Rupee’s consistent fall everyday is shaking the confidence in the system.”