The rupee on Monday tested a fresh record low of 78.43 amid outflow of foreign funds and other factors, according to analysts
The rupee had closed at 78.33 against the dollar on Friday. “The currency has drifted on the downward trajectory despite the softness seen in the greenback, as domestic equity indices erased much of the early session gains,” said Sugandha Sachdeva, VP, Commodity & Currency Research, Religare Broking Ltd.
“Besides, India’s forex reserves have witnessed a fall for the third consecutive week to $590.59 billion as the RBI is stepping up its intervention in the forex markets to curb the steep decline in the Indian rupee,” she added.
“We reckon that the 78.50 mark will provide near-term support to the rupee-dollar exchange rate, while a decisive breach of the same shall pave the way for further depreciation towards the 79.20 mark in the coming days,” she said.
However, key equity benchmark indices surged almost 1% following buying led by IT stocks.
The S&P BSE Sensex gained 433.30 points or 0.82% to 53,161.28. The Sensex stocks which gained the most included L&T (2.69%), Tech Mahindra (2.67%), HCL Tech (2.61%), Infosys (2.25%) and Asian Paints (2.19%).
The NSE Nifty-50 index gained 132.80 points or 0.85% to 15,832.05.
Vinod Nair, Head of Research at Geojit Financial Services, said, “Declining commodity prices have been lifting the exhausted domestic equity market during the recent sessions.”
“Despite this positivity, the underlying fear of recession, tightening monetary policy and inflation can trigger volatility going forward. A strong revival in the market can only be expected when the economy stabilises from these uncertainties and when FIIs turn net buyers,” he added.
