Indian Stocks Decline After 4-Day Gains; Rupee near All-Time Low
20 October, 2022 | Pranay Lad
Indian stock indices slightly declined, reflecting overnight gloomy sentiments from US markets, after extending gains for the fourth straight session until the previous session.
Analysts noted that among the investor community, concerns included the outflow of foreign money, the expanding current account deficit, and the worldwide tightening of monetary policy to combat inflation. At 9.56 am, the Sensex was down 145.01 points or 0.25 percent, trading at 58,962.18 points, while the Nifty was down 43.90 points or 0.25 percent, at 17,468.35 points.
“Even in the face of unfavourable news on the state of the world economy, the market remains strong due in large part to consistent inflows into mutual funds, particularly through the SIP method. Market corrections are unlikely to be severe as long as DIIs are well-funded. The positive Q2 figures, particularly those related to the banking sector, provide the market with fundamental support “the chief investment strategist at Geojit Financial Services, V K Vijayakumar, said.
On Wednesday, the US dollar gained more ground against the Indian rupee, pushing it below 83 for the first time. The rupee fell 61 points and hit a record low versus the dollar at 83.01 on Friday. It started off close to its record low this morning.
India’s foreign exchange reserves, which are currently at a two-year low, have decreased dramatically due to the RBI’s potential market intervention to support the weakening rupee.
In order to stop a sharp depreciation of the rupee, the RBI typically intervenes in the market through liquidity management, including by selling dollars.