Experts blame depreciating Rupee, fuel price hike for Sensex, Nifty plunge

Experts blame depreciating Rupee, fuel price hike for Sensex, Nifty plunge

Mumbai: Market analysts on Monday stated that the decline in the value of the Indian Rupee against the US Dollar and the sky-rocketing prices of crude oil were amongst the primary reasons for the plunging Sensex and Nifty indices.

The BSE Sensex closed trade on Monday having lost 467.65 points at 37, 922.17 points while the Nifty index dropped 157 points to be at 11, 438.10 points.

Speaking to ANI, Sunil Shah, a market analyst based in Mumbai, said, “The immediate reasons are the fall in rupee, it’s unabated. Today also we saw a historic low in Rupee prices. Second, crude oil prices are not softening. Going forward it looks like if there is an embargo or sanction in Iran in November, that will further aggravate the scenario. That will be a bad development for the Indian economy.”

The Indian Rupee fell to a new lifetime low of 72.67 against the US Dollar today.

Shah stated that other factors for the fall in the market were the worsening current account deficit numbers and the issues surrounding the Foreign Portfolio Investment (FPI).

“These are some of the most important factors for the fall in the market. Having said that, I will also say that the market had already become very expensive. If you look at the Price-to-Earning indicator, the trailing was around 27-28. Generally, it is around 15-18, so despite good earnings in the first quarter, corrections were bound to happen,” Shah added.

Meanwhile, another market analyst, Alok Churiwala, said that growing fears over the current account deficits that India is likely to face on account of the increasing crude oil prices was one of the primary factors for the fall in the market.

“If you see among emerging markets, the value of Rupee has dropped the fastest. Unless there is some respite from the crude oil front, things will be a little shaky,” Churiwala said.