The rupee fell more than two percent on Tuesday to close at 67.73 per dollar from 66.02.
The BSE Sensex fell by 651 points to end at 18,234 on Tuesday as the rupee fell to 67.73 per dollar from the previous close of 66.02. The 50 share Nifty fell 3.77% to 5341.
“Today’s movement in rupee has perplexed markets. The markets could head lower if FIIs continue to sell and if RBI fails to intervene and stop the rupee’s fall. The rupee should be lower than 65,” said Dhawal Dalal, EVP, Head – Fixed Income, DSP Black Rock Investment Managers.
Markets were also spooked by the rating agency S&P’s statement that there is one in three chance of a credit rating downgrade for India. S&P currently has BBB- rating for India and one notch downgrade would put India in a junk status.
“It wasn’t due to any specific event. It is a culmination of what has been happening over a long period of time. We have to wait and watch how the situation pans out,” Kenneth Andrade, CIO, IDFC Mutual Fund.
