India’s benchmark equity indices fell to their lowest
levels in 20 months as concerns about a global economic slowdown amid
slumping commodity prices and a weakening rupee spurred investors to
sell shares.
The rupee breached the 68-a-dollar mark
on Wednesday for the first time since August 2013. It closed at a record
low of 68.85 a dollar on August 28, 2013, just days before Raghuram
Rajan took charge as RBI Governor. Dealers said state-run banks
intervened on behalf of the central bank after the currency touched an
intra-day low of 68.17 a dollar, helping the rupee close at 67.95,
compared with Tuesday’s 67.65.
“The RBI intervened in
both the currency futures as well as in the spot market,” said a dealer
with a state-run bank. “The intention of the central bank was not to
allow the rupee to depreciate at a fast pace.” The central bank always
maintains that it intervenes to curb volatility and does not target any
level for the rupee.
The rupee has weakened 2.74 per
cent so far this year after declining more than 5 per cent in 2015.
Still, the Indian currency has performed better than its emerging market
peers from Russia, Brazil and South Africa. Dealers said there could be
more pressure on the rupee, going forward.
The
30-share Sensex lost a whopping 640 points during intra-day trades on
Wednesday to touch a low of 23,839.76. It finally closed at 24,062.04,
down 417.80 points or 1.71 per cent. This is the lowest close for the
Sensex since May 15, 2014, when the benchmark ended at 23,905.60.
Source:- The Hindu, 21-Jan-2016
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