While the rupee hit a fresh record low on Friday, Sensex slid 0.95 per cent or 501.34 points to 52,094.25.
- Nifty 50 index dropped as much as 0.97 per cent or 152.50 points
- Energy stocks sank in early trading
- Nifty Energy index fell 3.7 per cent in its sharpest drop
The rupee hit a fresh record low of 79.11 against the dollar even as the Sensex and Nifty began the second quarter with heavy losses on Friday. Both the indexes on Thursday capped their worst quarter since the early days of the Covid-19 pandemic.
While the BSE Sensex slid 0.95 per cent or 501.34 points to 52,094.25, the NSE Nifty 50 index dropped as much as 0.97 per cent or 152.50 points to 15,511.05.
WHY IS STOCK MARKET DOWN?
Energy stocks sank in early trading after the government raised taxes on exports of diesel, petrol, and jet fuel.
Oil-to-retail conglomerate Reliance Industries, India’s most valuable company, shed $19.35 billion in market value as its stock plunged as much as 8.7 per cent, marking its biggest intraday slide since November 2, 2020.
The Nifty Energy index fell 3.7 per cent in its sharpest drop since mid-May.
State-owned oil explorer and refiner Mangalore Refinery and Petrochemical slumped 10 per cent each, while Vedanta dropped 7.6 per cent to its lowest in 16 months.
The Nifty auto index slid 1.5 per cent, ahead of monthly sales data, while the Nifty Bank index fell 1 per cent.
Asian stock market peers got off to a shaky start on Friday as investors assessed risks to the economic outlook from inflation and interest-rate hikes.
RUPEE HITS ALL-TIME LOW
The rupee on Friday hit a fresh record low of 79.11 against the dollar, versus Thursday’s close of 78.97.
The rupee declined for a third straight quarter versus the US dollar for a fourth quarter as concerns over sustained inflation and continuing foreign fund outflows weighed.
The rupee weakened 4.2 per cent in the June quarter, its biggest loss since the March quarter of 2020 when the pandemic hit.
The spike in global crude oil prices in the aftermath of Russia’s invasion of Ukraine has pushed up global commodity prices and inflation. With India importing more than two-thirds of its oil requirements, the country’s trade and fiscal deficits are expected to widen this year and that has also hurt the rupee, according to a Reuters report.