Sensex turns negative for the year as the rupee dips below 81 against the dollar – here’s what’s going wrong on the street


mini

The Sensex and Nifty50 gave up nearly all of their gains for the year in a market-wide selloff on Friday. Globally, the mood remained tense after the Fed made a third consecutive rate hike of 75 basis points to combat runaway inflation.

Indian equity benchmarks have nearly given up all of their year-to-date gains amid a sustained market-wide sell-off and a lifetime low in the rupee against the US dollar. The Fed’s third straight 75 basis point hike in the U.S. key interest rate – albeit in line with expectations – and its pledge to fight inflation sent shockwaves through global markets, shaking sentiment on Dalall Street.

The two leading indices plunged as much as 1.4% on Friday, falling for the third day in a row. The Sensex lost 852.4 points to 58,267.4 on the downside, leaving a gain of 13.5 points for the year.
The Nifty50 slipped as low as 17,380.7 at the day’s lowest level, losing 249.1 points in intraday trading. The gauge at 50 titles only increased by 26.7 points for the year.

What is pulling the market down?

Analysts are counting fears of a global slowdown, the rupiah falling below the all-time high of 81 against the US dollar, a slowing pace of foreign fund inflows, frothy valuations, high levels of inflation over several years and geopolitical tensions as key factors behind the market fall.

“Today’s fall is more related to the weakening of the Rupee, which is impacting banking and financial services… Even on a rolling 12-month (TTM) basis, we are barely positive (0, 2%). The whole BFSI package has been performing better lately and therein lies the problem,” said AK Prabhakar, Head of Research at IDBI Capital. CNBCTV18.com.

The rupee briefly traded below 81 against the greenback during Friday’s session.

“Normally, when the rupee is weak, finances are okay… The same negativity can also be seen in oil marketing companies,” he added.

On Wednesday, the Fed announced a widely expected rate hike and reiterated its commitment to maintain hikes through 2023 to combat runaway inflation.

Fed Chairman Jerome Powell pledged to ‘continue’ the US central bank’s battle to fight inflation and said there was no painless way to bring inflation down .
Sensex turns negative for the year as the rupee dips below 81 against the dollar – here's what's going wrong on the street

Although the Indian market recovered about half of its intraday losses in a volatile session the next day, it continued to decline on Friday, led by weakness in most sectors.


cnbctv18-forexlive-benzinga

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button