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Rupee tumbles to a nearly 2-year low on sustained dollar; Sensex loses ground

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Mumbai :The benchmark BSE Sensex lost ground by over 120 points in early trade today as investors started scaling down their bets ahead of IIP and inflation data to be released later in the day amid weak global cues.

Moreover, the rupee sliding to nearly a two-year low of 64.67 against the American currency weighed.

Sliding for the fourth day, the 30-share index was trading lower by 120.70 points, or 0.43 per cent, at 27,745.39, with metal, oil and gas, PSU, realty and banking stocks contributing to the fall.

The gauge had plunged 432.04 points in the previous three sessions on lacklustre earnings numbers.

On similar lines, the Nifty fell 54.15 points, or 0.64 per cent, to 8,408.20.

Brokers said sustained selling by investors, coupled with continued capital outflows by foreign funds ahead of release of key macro data—Index of Industrial Production (IIP) for June and consumer price inflation (CPI) for July—hastened the fall.

Besides, a weak trend at other Asian markets after China lowered the yuan against the dollar for the second day, fueling concern about the health of the world’s number two economy, accelerated selling by participants, they said.

Bucking the trend, IT stocks such as Infosys, TCS and Wipro, which get their revenues in dollar, rose up to 1.87 per cent, backed by a strengthening greenback.

Sun Pharma was trading 2.79 per cent higher despite the company yesterday reporting 60 per cent drop in consolidated net profit at Rs 478.96 crore for the quarter ended June 30.

Among other Asian markets, Japan’s Nikkei was down 1.10 per cent while Hong Kong’s Hang Seng shed 1.49 per cent in early trade today. Shanghai fell 1.19 per cent in early trades.

The US Dow Jones Industrial Average ended 1.21 per cent lower in yesterday’s trade.

Staying on a downward trajectory for the fifth straight session, the rupee lost another 48 paise against the US dollar to 64.67, its weakest level since September 2013, due to appreciation of the dollar overseas after China devalued the yuan for the second straight day.

Forex dealers said increased demand for the greenback from importers after China lowered the yuan value continued to put pressure on the rupee.

Furthermore, a lower opening of the domestic equity market played spoilsport, they said.

The rupee had plunged 32 paise to close at nearly a 2-month low of 64.19 per dollar in yesterday’s trade on persistent demand for the American currency from banks and importers on the back of a higher greenback overseas.

Meanwhile, the benchmark BSE Sensex was down 120.70 points, or 0.43 per cent, at 27,745.39 in early trade today.

PTI