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Updated: June 1, 2012 03:04 IST

Rupee swings, equities end lower

Special Correspondent
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Indian rupee on Thursday tumbled by 26 paise to trade at a new all-time low of Rs 56.50 against the US dollar on increased capital outflows and strong demand from importers for the American currency. File photo: P.V. Sivakumar
The Hindu
Indian rupee on Thursday tumbled by 26 paise to trade at a new all-time low of Rs 56.50 against the US dollar on increased capital outflows and strong demand from importers for the American currency. File photo: P.V. Sivakumar

The disappointing gross domestic product (GDP) number dragged rupee down to a new low of 56.52 in the intra-day while the equities remained weak throughout the day before closing lower.

The rupee was trading in the range of 56.40-56.50 early in the day. It strengthened to 56.23/24 later.

However, it gained to quote at 55.74 within a span of few minutes on rumours that the Reserve Bank of India would sell dollars to oil companies directly. This rumour was later denied by the central bank and oil companies. This saw the rupee depreciate to 56.20 levels. Finally, it closed at 56.08/09 compared to Wednesday's close of 56.23/24.

“The rupee movement again proves that strong speculation is very much exists in the rupee market. Though the international factors are still very negative added with lower fourth quarter GDP figures, the rupee might remain slightly negative till we see a correction back below 55,” said a dealer.

The GDP January-March quarter dipped to a nine-year low of 5.3 per cent as the manufacturing sector contracted.

“The disappointing GDP figure further underscores the need for immediate actions to be undertaken by the policy-makers in order to avoid an entrenched and prolonged period of slowdown,” said Upasna Bhardwaj, India economist, ING Vysya Bank.

Meanwhile, the Bombay Stock Exchange 30-share benchmark index, Sensex, closed at 16218.53 with a fall of 93.62 points. The fall was led by automobile stocks, banks, consumer durables, capital goods, metal and FMCG. All other sectoral indices ended in the positive territory with realty gaining the most.

On the National Stock Exchange (NSE), a broader 50-share Nifty closed at 4924.25 with a loss of 26.50 points.

“Investors remain wary of India's growth prospects after the Government released downbeat quarter four GDP numbers,” said Amar Ambani, Head of Research, IIFL.

More In: Markets | Business

you are right Girish had been to Amsterdam last week and saw local
people taking pride in use of Bicycles and local transport.Hardly any
cars to be seen on the road.

from:  Deepak
Posted on: Jun 5, 2012 at 08:52 IST

Besides cutting the salary of executives we must also make people realize that not only there salary but extravagant way of leaving by Indians also do contribute to this crisis.Our demand for oil imports are sky rocketing,we feel shame in taking public mode of transportation and mostly travel in car alone for regular short distance travel, how can we expect to be economically safe.Not only Oil we also rely heavily on foreign goods even though they are available in indian market. There is no doubt that we are growing in economical terms but our saving is very poor and get easy credit for buying things and living beyond our means is also aggravating the problem.Again it is not only the salary that is causing problem,it is the way this salary being spend frivolously is troubling.The laibility for poor performance of Indian Rupee can be attributed to all indians not only to few executives and other group of People.During this bad time we must stand together and act together wisely.

from:  Dinesh Yadav
Posted on: May 31, 2012 at 11:47 IST

this situation is very bad.if it continue for a month our country moves to a another crisis. the confidence level about our currency fallen in future also . this will lead to a severe attack to our currency. some efforts on the part of govt. and rbi takes to curb the bad effects.

from:  GIRISH
Posted on: May 31, 2012 at 11:06 IST

nobody is using infinite free infinite solar energy as heat , light and steam without converting the same in electricity while Indian energy related imports are Rs 10 lac crore and are spending 15 lac crore a year on energy at a huge under recoveries for energy sector.For policy makers what to say? Wake up indians. We all are finishing the nation for votes, notes and comfort. Infinite cheaper resources are available indigenously use them. Try this My 4 pot box type solar cooker of 35 dollars Rs 1850 can save 35 cylinders of lpg in its life time of 10 year at 3 to LPG cylinders of 14.2 kg per year at 1 dollar Rs 50 per cylinder or lpg at 7 cents Rs 3.50 per kg as one cylinder is equal to 200 units of electricity cost is 4 kwh per cent or Rs 0.25 per kWh. Isn’t it free try one in Arizona mine is making potato, porridge ( daliya), pulse and stuffed vegetables at present free of cooking cost and time. 25 % of energy used in india is for cooking and water heating.

from:  alok
Posted on: May 31, 2012 at 10:56 IST

I think everyone in India who is rich love inflation rupee depreciation and acting in same direction. One who is middle class or poor doesn't understand its perils and his duties in this regard so he is also going in wrong direction and helping rupee depreciation. Use of cheaper, less subsidized and indigenous stuffs can reduce inflation and appreciate rupee. But we are bent upon using imported, costly, subsidized and scarce resources with inland use of imported bullion , crude, tech , food , tours, services and Indian luxuries being chief culprits. Look we fool Indians are enjoying under pricing of Rs 1 lac crore per year on imported lpg and kerosene digging the grave of Indian economy while poorest 10 crore families can be given coal in Rs 10000 crore. Many times more than this fault is that nobody is using infinite free infinite solar energy as heat , light and steam without converting the same in electricity while Indian energy related imports are Rs 10 lac crore,.

from:  alok
Posted on: May 31, 2012 at 10:53 IST

D Subbarao the Governor RBI has failed miserably in controlling the fall
of rupee,hence must resign immediately to allow more capable person to
head RBI.Pranab Mukharje owes an apology to the nation for not able to
curb inflation and petrol prices while allowing to affluent enjoy diesel
at lower cost.We are not prepared to hear any more excuses from Manmohan
singh and co.

from:  N Kumaraswamy
Posted on: May 31, 2012 at 10:37 IST

Cut the Salary of Govt Employees to 50%, from President of India to
Scavanger. Stop Printing of (fake) Notes, by Govt of India.

from:  Prathiba the Great
Posted on: May 31, 2012 at 10:06 IST
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