Indian Stock Markets, Rupee Plunge
International Business Times
Published Aug 24, 2015 03:13AM ET
Updated Aug 24, 2015 03:30AM ET
Indian Stock Markets, Rupee Plunge
By Aditya Tejas -
India's stock markets saw major losses after opening Monday, joining a list of markets worldwide that are reacting to concerns over China’s economic instability and slowdown.
The BSE Sensex and the Nifty, India’s two biggest stock exchanges, crashed nearly 4 percent Monday, and the rupee slumped 1 percent to reach a two-year low against the dollar.
As of 2:28 a.m. EDT, the Sensex was trading down 3.65 percent at about 26,370 points, and the Nifty had lost 3.75 percent to reach about 8,000 points. The Indian rupee had fallen about 0.4 percent to about 66.5 rupees against the dollar.
However, Reserve Bank of India Governor Raghuram Rajan said Monday that the country was in a better position than many other emerging markets. He said that India’s low inflation and strong economic fundamentals would inspire confidence in investors. He added that the central bank would be ready to tap into its reserves to ease the volatility if necessary.
"Many of you watching markets this morning worried about volatility... India is in a good condition. RBI won't hesitate to intervene on rupee," Rajan said, according to NDTV.
Monday’s fall was triggered by ongoing volatility in China’s stock markets, which have lost about 30 percent of their value since peaking in early June. The rupee weakened on the news that China devalued its yuan by about 2 percent.
Agum Gupta, a trader at Standard Chartered bank (LONDON:STAN), said that he expected the rupee to strengthen against the U.S. dollar later in the week. "We will keep an eye on supply of USD from local government banks but the move in global markets will remain key for the pair at the moment," he told Moneycontrol.
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Written By: International Business Times
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