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.
