TMS Ep268: Rupee's record plunge, diesel cars, markets, algo-trading

The Indian rupee continued to depreciate as it hit the all-time low of 81.63 against the US dollar on Monday. It is despite the central bank’s efforts, which spent close to $100 billion to stem the fall, easing of commodity prices and return of foreign capital. Experts opine that the fall in rupee is in line with the massive fall in global currencies against the US dollar. Even though the falling rupee doesn’t spell bad news for all the sectors, what will be the implications? 

Depreciation of rupee may also blunt the benefits India may have enjoyed from the recent correction in commodity prices. So relief on petrol and diesel prices is unlikely anytime soon. Off late, the price gap between petrol and diesel has been narrowing. The price advantage that diesel enjoyed fuelled the rise of diesel vehicles in the country. But that edge is waning. And BSVI emission norms dealt another blow to the sales of diesel vehicles. So what is the road ahead for diesel cars in India? 

Moving on, the market sentiment has turned negative after the US Federal Reserve delivered a third large rate hike last week with over half of Nifty500 stocks slipping below their key moving averages. So, is this fall set to continue or is the recent selling an overreaction? 

SEBI recently issued guidelines for stock brokers who provide algorithmic trading services. And its chairperson Madhabi Puri Buch said last week that the regulator was not for or against the algo trading as long as there is “transparency and disclosures”. But what exactly is algo trading? Listen to this episode of the podcast to know more.