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Rupee falls the most in 11 weeks; stocks, too, crash on woes in emerging markets

Saturday, 25 January 2014 - 7:17am IST | Place: Mumbai | Agency: dna

The rupee on Friday hit its lowest in nine weeks against the US dollar in tandem with the overall declining trend in currencies of other emerging economies as worries of slower recovery in growth worldwide gained momentum.

Indian equities, too, tanked the most in over three weeks with foreign institutional investors or FIIs turning net sellers after being buyers for 11 preceding sessions.

The rupee fell by 1.23% or 76 paise against the greenback to close at Rs 62.69 as foreign investors sold emerging market assets and currencies following the massive slide of 11.65% in the Argentinian peso on Thursday. Other currencies like Turkish lira, Brazilian real and South African rand too fell over 1%.

Friday’s fall in the rupee is the sharpest in over 11 weeks and is now trading at its lowest level since November 22, 2013 when it had closed at 62.87.

Equities too witnessed broad based selling with S&P BSE Sensex crashing by 240.10 points or 1.12% which is the biggest fall in over three weeks. Nifty, on the other hand ended 1.24% lower or 78.90 points at 6,266.75.

Gopal Agrawal, CIO at Mirae Asset Global Investments believes that the upheaval in emerging market currencies in last few weeks along with sharp fall in US treasury yields of nearly 6% in last two days has led to investors getting concerned about global growth environment.

“The volatility in global currency markets is here to stay. Also with recent housing data from US coming out on muted levels, there’s anticipation that growth may continue to remain slower for some time,” he said.

Foreign institutional investors turned net sellers of equities worth Rs 240 crore after having net bought shares consistently in last 11 sessions. Domestic institutions too were net sellers of stocks worth Rs 78 crore.

All the sectoral indices on the BSE ended in red with interest rate sensitive sectors like realty and capital goods tanking the most by 3.19% and 2.68% respectively.

The market breadth too was highly negative with only 3 out of every 10 stocks listed on BSE managing to advance.

Going ahead, experts see caution prevailing on Monday as well ahead of the crucial RBI policy meet on Tuesday and US Fed meet on January 28-29. However experts don’t see much trouble for Indian rupee this time around as India’s current account deficit and forex position are in much better shape than it was six months ago when the Indian currency had slid to its all time low 68.85.

Awash in red
Foreign institutional investors turned net sellers of equities worth Rs 240 crore after having net
bought shares consistently in last 11 sessions

All the sectoral indices on the BSE ended in red with interest rate sensitive sectors like realty and capital goods tanking the most by 3.19% and 2.68% respectively

The market breadth too was highly negative with only 3 out of every 10 stocks listed on BSE managing to advance

Going ahead, experts see caution prevailing on Monday as well ahead of the RBI policy meet on Tuesday and US Fed meet on January 28-29.




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