The 10-month low of the rupee increases the selling pressure in the stock market

According to Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, the rupee depreciated to almost a 10-month low at 83.14, and the FII outflow of about of Rs 10,000 crore in August so far also contributed to selling at higher prices.

Despite poor international indications, pressure on domestic stocks persisted. Sensex was down 388.40 points, or 0.59 percent, at 65,151.02 while Nifty began down and stayed in the red throughout the day to conclude with a loss of 100 points (-0.5%) at 19,365 levels.

However, with the Nifty midcap 100 up 0.2% and the Nifty smallcap 100 up 0.1%, the focus switched to the wider market. Every industry finished in the negative, with the exception of PSU banks and consumer durables.

Following the aggressive tone of the FOMC minutes meeting and concerns about the possibility of a reduction in China’s sovereign credit rating by Fitch, Indian stocks succumbed to global volatility, according to Khemka.

According to Vinod Nair, Head of Research at Geojit Financial Services, the local market’s potential to recover was being hampered by the growing effect of poor global signals, which led to persistent selling pressure. In contrast to the widely expected rate halt, the publication of the Fed minutes revealed a mixed opinion among its members over the need of more rate rises.

“At the same time, the Indian rupee fell as a result of the dollar index reaching 103.5; however, probable RBI intervention provided some support. Further affecting market dynamics is the expectation that the rise in US bond rates would restrict foreign investment inflow into the Indian market.

A total of 1,777 shares increased, 1,696 decreased, and 152 stayed unchanged. According to Omkar Kamtekar, Research Analyst at Bonanza Portfolio, ITC, LTIMindtree, Divis Lab, Power Grid, and Reliance Industries were among the top Nifty losers, while Adani Ports, Titan Company, Adani Enterprises, Bajaj Auto, and SBI were among the top gainers.

The dollar’s strength and the weak local markets caused the rupee to fall to a fresh 10-month low.

India’s inflation rate in July increased from 4.87 percent in June to 7.44 percent, above the predicted 6.4 percent.

Due to widespread risk aversion and a high US dollar, we anticipate the rupee to trade with a negative bias, Kamtekar said.