The rupee opened sluggish and fell to an all-time low of 96.25 against the USD in early trading on Monday, as rising crude oil costs, uncertainty around the world, and a stronger dollar continue to be major challenges to the local currency.
Higher crude oil prices, a stronger US dollar, and continuous geopolitical concerns have all combined to create a challenging environment for developing market currencies, according to forex traders, and the rupee is now clearly showing this stress.
Meanwhile, the Sensex was down almost 1,000 points at 74,249 around 10 AM. However, the markets bounced back to positive territory as a result of value buying at lower levels.
At the close, the Sensex advanced 77.05 points or 0.10 percent to settle at 75,315.04, while the Nifty gained 6.45 points or 0.03 percent to end at 23,649.95. Among the sectoral indices, Nifty IT emerged as the top outperformer, rallying 2.43% amid strong buying interest in technology stocks. Pharma and Private Banking stocks also provided mild positive support to the benchmark indices.
Umesh Padala, Chairman, Cargo Matters, said the 1000-point fall in the Sensex today clearly shows that investors are nervous about global market conditions and rising uncertainty across sectors. After months of strong rallies, some correction was expected as traders started booking profits and foreign investors turned cautious.
“However, this fall should not be seen as a sign of weakness in the Indian economy. The country’s core sectors continue to remain stable with strong government spending, growing manufacturing activity, and steady domestic demand supporting the market,” he said
Sharp falls often create fear among retail investors, but market history shows that temporary corrections are a normal part of equity markets. Experienced investors usually see such phases, as an opportunity to stay patient rather than react emotionally, added Padala.
