Rupee plunges to new low as Indian equities join global sell-off

The rupee plunged to a fresh low on Thursday, as Indian equities joined a global sell-off amid mounting concerns growth would slow in the face of a trade war between the United States and China.

Concerns that the US Federal Reserve would continue to tighten interest rates amid strengthening economy and labour market also sparked fears about capital outflows, hurting the rupee.

"The rupee continues to make a new record low, as the global and domestic equities experienced a steep sell-off. Continued FII outflows from debt and equity market is keeping sentiments bearish," said Rushabh Maru, Research Analyst at Anand Rathi Shares and Stock Brokers.

The rupee had opened at 74.31 to a US dollar at the Inter-Bank Foreign Exchange Market, before slumping to a new low of 74.48. It had settled at 74.22 (74.2175) on Wednesday.

However, it staged a slight recovery on suspected intervention by the Reserve Bank of India, and around 11.50 a.m, traded at 74.39 (74.3850) to a US dollar.

Global crude oil prices eased overnight amid a rise in US inventory. However, prices may resume their uptrend, as US sanctions on Iran begin to bite from November.

Heavy selling was seen in banking, metals, automobile, IT and capital goods counters. All 19 sector-based indices on the BSE traded in the red.

At 12.12 p.m, The S&P BSE Sensex was at 34,109.16, down 651.73 points or 1.87 per cent. It had opened at 34,063.82, but soon crashed over 1,000 points on global sell-off.

The broader NSE Nifty50 traded 10,261.30, down 198.80 points or 1.90 per cent.

--IANS

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