MUMBAI: The rupee logged its worst single-day decline in a month losing 0.5% to close at 84.8250, marking its worst performance since April 9, while equity benchmarks closed marginally higher in a volatile session on Wednesday as the country launched missile strikes on terrorist hideouts in Pakistan.
Other asset classes, the safe haven gold and the government bonds, performed mixed with gold rallying 2,730/10 grams to Rs 98,640 but the benchmark 10-year bond yield dipped to 6.3381% on Wednesday.
In the wee hours of Wednesday, the Air Force carried out missile and bombing sorties over nine locations in Pakistan and the Pakistan-Occupied Kashmir in retaliation for the Pahalgam massacres last month when Pak-based terrorists shot dead point blank 26 tourists after identifying their religion.
During the day, the rupee’s losses were curbed on the back of dollar selling interest from a large conglomerate near the 84.90 levels and on intermittent offers from state-run banks, a trader at said, adding the rupee is likely to keep facing intermittent pressure depending on how the situation evolves.
In the near-term, bullish bets on the currency could be scaled back while the Reserve Bank may step in to limit sharp swings, the trader added. On the other hand, Dalal Street saw the benchmarks gyrating between deep loses and marginal gains with the Sensex finally ending 105.71 points up at 80,746.78. In intra-day trade, it hit a high of 80,844.63 and a low of 79,937.48. On the other hand, Nifty advanced by 34.80 points to settle at 24,414.40 after see-sawing a high of 24,449.60 and a low of 24,220 during the session.
"Even as the country is in the middle of a military action against terrorist network across the border, markets witnessed gyration during intra-day trade but eventually managed to shrug off the uncertainty to end slightly higher. "While the mood will be of caution due to the tension, markets could witness choppy sessions with stock-specific activity over next few days," Prashanth Tapse of Mehta Equities said.
The gainers of the day were Tata Motors which rallied more than 4%, Bajaj Finance, Adani Ports, Tata Steel, Titan, and Power Grid, while the losers were Asian Paints, Sun Pharma, ITC, Nestle, and Reliance. On the energy side, Brent crude climbed 0.64$ to $62.55 a barrel.