The rupee plunged to a new record low and the benchmark indices ended in the red after on Monday as US president Donald Trump’s aggressive tariff policies against Mexico, Canada and China and the latest threat against Europe triggered fears of a global trade war.
The rupee breached the 87/$ mark for the first time. It slumped 58 paise, ending at 87.195/$ against the previous close of 86.616/$, marking its biggest single-day loss since January 13. During the day, the rupee fell to a low of 87.2950. However, it recouped some losses as a state-owned bank sold dollars on behalf of the Reserve Bank of India (RBI) at 87.29/$, preventing the rupee from falling beyond 87.16.
The Sensex and the Nifty fell 0.41% and 0.52%, respectively, in line with global peers. However, they managed to halve their losses after both indices declined up to 1.11% intraday. The Sensex ended the day at 77,186.74, while the Nifty closed at 23,361.05.
“It was a mixed session, as prices held strong at key support levels after the early decline, leading to consolidation. Despite the anticipation surrounding the budget session, there’s a minimal impact on Nifty’s price action,” said Rajesh Bhosale, technical analyst at Angel One.
Trump has imposed 25% tariffs on Canada and Mexico and a 10% tariff on China, which pushed the dollar index up by 1.01% to 109.46. He also said Europe is next in the firing line.
Oil prices rose during the day due to fears of supply disruption, though the gains were capped by concerns over what could be an economically damaging trade war. Brent crude rose 1.41% to $76.74 per barrel in futures trading.
The broader indices underperformed the benchmarks, with the BSE Midcap and BSE Smallcap indices declining 0.89% and 1.77%, respectively. Investors’ wealth eroded by `4.3 lakh crore, bringing the total market capitalsation down to `419.5 lakh crore. The market breadth was negative, with 2,877 stocks declining against 1,139 advancing.
Among sectors, capital goods, industrials, power, utilities, and oil & gas were the top losers, disappointed by lower capital expenditure spending. In contrast, consumer durables were the top gainers, benefiting from the government’s tax relief measures. On Monday, index of FMCG stocks,
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