The rupee continued to its southward-ho for the fourth month, losing 4 paise to close at new low of 85.83 against US dollar on Monday, weighed in the blood bath on the equity markets amidst the persisting bearish tilt
Traders said the rupee hit a new lifetime low as it was hurt by a persistent bearish outlook on the currency that has been troubled by a broadly stronger dollar and tepid capital flows following a slowdown in economic growth. The rupee began to face its peril in October and has not been able to recoup since. The currency has since lost more than Rs 2.07 to a dollar since then.
The currency ended the session at 85.83, down nearly 0.15% on the day.
The blood bath on Dalal Street also added to the fall wherein the Sensex bled 1.7 percent from Friday’s close while the Nifty plunged 1.6 percent to close below the sensitive 24,000 mark.
While the rupee remained under pressure throughout the day, dollar-selling intervention by the Reserve Bank helped limit losses, traders said.
"It seems like the RBI will hold it the rupee below 86 before Donald Trump assumes office on January 20," a trader said.
Meanwhile, the dollar index was down 0.3 percent at 108.5, retreating from an over two-year high, but that did little to help the rupee in the face of strong dollar bids in the local spot and in the non-deliverable forwards (NDF) market, traders said, adding dollar demand from foreign banks, likely on behalf of custodial clients, also weighed on the rupee during the session.
The equity markets saw a 'Monday mayhem', with the benchmark Sensex crashing 1.6 percent the Nifty bleeding by 1.8 percent as investors were spooked by the new viral infection called the HMPV in China and a few other Asian nations. The blood bath saw investors losing a whopping Rs 9.5 trillion on a single day.
The market is also worried by the growing concerns over the third quarter earnings.
Extending losses, the Sensex tanked 1,258.12 points or 1.59 percent at close at 77,965, after plunging 1,441.49 points during the day while Nifty slumped 388.70 points or 1.62 percent to 23,616.05 after skidding 452.85 points or 1.88 percent.