Rupee plummeted sharply against the dollar on Tuesday, 15 November 2016 owing to the American currency's strengthen overseas amid a lower opening of the domestic equity market. Continued demand for the American unit from importers and the greenback's persistent gains against other Asian currencies since Donald Trump's unexpected win in the US presidential election on November 8, put pressure on the rupee.
The domestic currency opened at Rs 67.53 against the dollar and dropped to a low of 67.735 so far during the day. In the spot currency market, the Indian unit was last seen trading at 67.705. On Friday, the rupee had lost 62 paise to end at over three-month low level of 67.25 against the American currency on fears of capital outflows amid resurgent dollar overseas. Forex market remained closed yesterday on account of 'Guru Nanak Jayanti'.
Domestic benchmark indices dropped in early trade, with the indices extending Friday, 11 November 2016's steep slide of around 2.5 percent. At 9:30 IST, the barometer index, the S&P BSE Sensex, was down 288.53 points or 1.08 percent at 26,556.54. The Nifty 50 index was down 91.35 points or 1.1 percent at 8,204.95. Auto and realty stocks led losses on the bourses. Uncertainty surrounding recent demonetization of higher denomination notes by the Indian government and future policies of newly elected US president Donald Trump continued to weigh on sentiment.
In overseas markets, Asian stocks were mixed. US stocks closed little changed yesterday, 14 November 2016, after rising dramatically the week before and a decline in the technology sector offset a steep rise in financial stocks as investors bet on higher interest rates. The Dow Jones Industrial Average settled at another record closing high.
Meanwhile, the U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell 0.11 percent at 99.92, dipping below levels just above 100 reached on Monday. Overnight, the dollar extended gains to hit an eleven-month high against the other majors currencies on Monday, as optimism over the economic implications of a Donald Trump presidency continued to boost demand for the greenback.
The dollar continued to strengthen amid hopes that increased fiscal spending and tax cuts under a Trump administration will bolster economic growth and inflation.
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