Sensex Slumps 470 Points; Rupee Continues To Slide

After opening the day in red, share markets in India witnessed negative trading activity throughout the day and ended the day in red. All sectoral indices traded in red, with stocks in the metal sector and stocks in the auto sector, leading the losses.

At the closing bell, the BSE Sensex stood lower by 467 points (down 1.2%) and the NSE Nifty closed down by 151 points (down 1.3%). The BSE Mid Cap index ended the day down 1.7%, while the BSE Small Cap index ended the day down 1.1%.

The rupee was trading at Rs 72.45 against the US$ in the afternoon session. Oil prices were trading at US$ 77.39 at the time of writing.

Asian stock markets finished in red. As of the most recent closing prices, the Hang Seng was down by 1.3% and the Shanghai Composite was down by 1.2%. The Nikkei 225 was up by 0.3%. Meanwhile, European markets were trading on a positive note. The FTSE 100 was up by 0.4%. The DAX, was up by 0.3% while the CAC 40 was up by 0.4%

In news about the economy. The Indian Rupee continued its slide against the US Dollar as it hit a new low of Rs 72.67 per US Dollar.

The rupee has been falling lately on the back of many factors such as rising current account deficit, rising global crude oil prices, and tepid export growth.

It has been falling against the US dollar since the start of this calendar year.

The ongoing uncertainty in global markets especially in emerging nations has added to the weakness in the Rupee.

What does the fall in rupee mean for the Indian economy?

A depreciation in rupee means importers buying goods and services at a higher rate that earlier. This doesn’t bode well for a developing economy that relies heavily on imports.

Also, India imports most of its oil requirements. So, a fall in rupee leads to a consequent rise in the import bill. The depreciation of the rupee will also add to crude oil’s rising cost.