Rupee closes at ten-month low as economic growth falters

Rupee closes at ten-month low as economic growth falters”

At one point in the day, the Sensex fell over 850 points to 36,466.

At close, the Sensex was down 769.88 points or 2.06% at 36,562.91, while Nifty was down 225.40 points or 2.04% at 10,797.90. Only two IT stocks - TechM and HCL Tech - made small gains.

On the BSE, ICICI Bank, Tata Steel, Vedanta, HDFC, IndusInd Bank, Tata Motors and ONGC saw their stocks decline the most.

A slew of negative news piled up over the long weekend, latest being the USA and China indulging in fresh tariff war, with both sides announcing fresh rounds of import duties, and the deepening domestic slowdown, with paltry growth in eight core sectors, which slipped to 2.1 per cent during July from 7.3 per cent a year ago.

The rupee, which opened weaker at 71.97 a dollar as compared to precious close of 71.41, touched the day's low of 72.40 before closing at 71.39 a dollar.

All the sectoral indices ended lower led by the PSU Bank, metal, energy, infra, pharma, FMCG, auto and IT. The India VIX index, which is looked upon as a measure of near-term volatility, rose almost 11% to close above the 18-mark at 18.06, though it is still much lower than its 52-week high of almost 30.18. "The continuing negative global cues, the raging tariff war between the USA and China, and the likely sluggishness in the economic fortunes of economies around the world have also been behind the rot in the markets here as well as elsewhere", said Joseph Thomas, Head of Research - Emkay Wealth Management.

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Big market voices also echoed the slowdown in the economy, with State Bank of India Chairman Rajnish Kumar saying, "Almost all the sectors are seeing slowdown" and Housing Develop-ment Finance Corporation Chairman Deepak Parekh saying, "Thousands of residential homes were finding no takers".

However, the merger will still be painful as a result of the geographic and cultural diversity of the merging entities, they added.

A private forecaster's PMI data showed the country's manufacturing sector activity declined to its 15-month low in August.

The Indian economy, the third-largest in Asia, expanded just 5% year-on-year in the three months ended June - the lowest pace since March 2013, official data showed on Friday, far below the 5.7% forecast in a Reuters poll, suggesting the economy had lost momentum. The markets were closed on Monday on the occasion of Ganesh Chaturthi.

Exchanges in Europe were also trading the the red in their respective early sessions. Global oil benchmark Brent crude fell 1.07 % to 58.03 per barrel (intraday).

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