THE rupee plunged 62 paise on Tuesday to close at a nearly six-month low of 71.40 against the US dollar in line with battered equities as global market turmoil and Argentine currency crash drove investors to safe havens. At the interbank foreign exchange, the rupee opened at 71.15 and touched a high of 71.02 and low of 71.40 against the American currency during the day. The domestic unit finally settled 62 paise lower at 71.40 against the US dollar.
The rupee had closed at 70.78 against the American currency on Friday. Forex markets were closed on Monday on account of Bakri Id. The domestic currency has lost 71 paise in the past two sessions. Domestic forex market that was already battling against foreign fund outflows for some time has come under more pressure due to currency crisis in Argentina and global trade war concerns. Argentina’s peso plunged on Monday after the country’s center-right leader Mauricio Macri performed poorly in primary elections.
Continuing their bearish outlook, foreign investors sold Indian equities worth Rs 638.28 crore on a net basis on Tuesday, as per exchange data. Meanwhile, the benchmark BSE Sensex settled 623.75 points, or 1.66 per cent, lower at 36,958.16; and the NSE Nifty slumped 183.80 points, or 1.65 per cent, to 10,925.85. “Reflecting global risk-off sentiment, stock markets across the globe slumped today as fears about a drawn out China-US trade war, protests in Hong Kong and a crash in Argentina’s peso currency drove investors to safe harbours like bonds, gold, and the yen,” said V K Sharma, Head-PCG & Capital Market Strategy, HDFC Securities.