The rupee slumped to an over two-year low on Friday, weighed down on fears of a rate hike in the US. The sharp fall in Indian equity markets also weighed on the rupee. The rupee fell to 66.99/dollar - its lowest since September 2013, when Reserve Bank of India Governor Raghuram Rajan took charge of the central bank amid a crisis-like situation. The Indian currency had closed at 66.65 per dollar on Thursday.
Here is a 10-point cheat-sheet:
1) The renewed weakness in the rupee has come from external factors, in particular from the US, where the Federal Reserve is likely to raise rates for the first time in a decade.
2) Federal Reserve Chair Janet Yellen, speaking before Congress' Joint Economic Committee on Thursday, said the United States may be "close to the point at which we should be raising" rates. This has reinforced expectations that the US central bank will hike rates in its policy meeting on December 16. (Read more)
3) The sharp rise in the dollar index has also weighed on the rupee. The strengthening in the euro, which the rupee closely tracks, also led to pressure on the Indian currency. Brokerage Edelweiss said the rupee could trade in a range of 66.50 to 67.20 in the near term.
4) The Sensex fell nearly 250 points while Nifty slumped below 7,800 level today, tracking a selloff in global markets, a factor that also weighed on the rupee.
5) The selloff in the global stock markets today has been attributed to the European Central Bank's stimulus package which fell well short of markets' high expectations.
6) Expectations of a Fed rate hike have led to selling pressure in emerging market assets. In India, foreign institutional investors sold equities and bonds worth over Rs 7,000 crore last month, pulling down stock markets and putting pressure on the rupee. Foreign investors have continued their selling spree this month, selling Indian stocks worth over Rs 600 crore.
7) Selling pressure in Indian stock markets was broad-based with most sectoral indices, barring the healthcare index, on the BSE trading in the negative. Banking, IT and FMCG stocks in particular were under strong selling pressure. HDFC Bank, HDFC, ITC and Infosys were down 1.5 per cent to 2 per cent. Bucking the weak trend, Sun Pharma surged 5 per cent after India's biggest pharma company said that one of its subsidiaries has received final approval from US drug regulator for generic version of Gleevec.
8) IT stocks have been under pressure in the past few sessions. Most Indian IT companies have 10-30 per cent of their workforce based in Chennai, where floods hit normal business activities.
9) Despite weak global cues, analysts say that Nifty has support at around 7,750 levels. And a breakthrough on the GST (Goods and Services Tax) Bill could be positive trigger for Indian markets.
10) Asian markets were weak today with Japan's Nikkei falling over 2 per cent and China's stocks down nearly 1 per cent. Overnight, Wall Street's benchmark S&P 500 stock index had its biggest one-day percentage decline since September 28, dropping 1.4 per cent.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
