Are equity markets pricing in rupee weakness and related risks?

Analysts say equity markets will begin baking in the negatives and weakness in the rupee if the US Fed chief Jerome Powell delivers a hawkish commentary at Jackson Hole later this week

The growing risk-off sentiment across global financial markets is likely to keep the rupee under pressure in the near term, analysts said, as the strength in the US dollar is unlikely to ease anytime soon. 

Meanwhile, equity markets, they believe, have not fully factored in the weakness in the Indian currency and its related risks yet. 

“From a near-term perspective, we maintain a depreciating bias on the rupee due to rising crude oil prices and volatile inflation trajectory but this has not been fully priced in by Indian markets," said Prashant Pimple, CIO-fixed income at Baroda BNP Paribas Mutual Fund.