The price of the Indian rupee declined by 1 paisa and was at the lowest level of 83.72 (provisional) against the US dollar for the saving on Thursday. This put pressure on the INR vs USD rate as there was increased demand for the American dollar in the overseas market as well as outflow of foreign funds.
The previous down turning in the Indian equity markets where forex traders began to sell the rupee. Recent action by the government of raising the tax on capital gains also affected the market and put a lot of pressure on the INR vs USD and the equity market.
In the interbank foreign exchange market, rupee opened lower at 83.72, it even touched the intra-day high of 83.66 and bottomed out at 83.72 in relation to the dollar within the trading session. Finally, it reached its lowest level with an overall index of 83.72 (provisional), such a number being 1 paisa lower than the previous closing rate.
It is noted that due to government raising the tax on capital gains, investors have shifted to pessimistic view which is evident from a lot of selling pressures in the markets. This policy change is completed to acts like it can demerit the Indian market by cutting down its appeal to both local as well as global investors.
Domestic equity BSE 30 shares which constitutes Sensex shed by 109.08 points or 0.14 percent and it is at 80,039.80 points. On the other hand, the Nifty shaved off 7.40 points or 0.03 percent, and ended at 24,406. 10 points.
Globally, dollar index, which shows the performance of the dollar against a group of 6 top currencies, was at 104.17, down by 0.21 per cent. More so, Brent crude futures which is the international standard for oil dropped by 1.79 per cent to USD 81.25 per barrel.
FIIs are net sellers in capital markets on Wednesday for the value of Rs 5,130.90 crore, as per data available from the exchanges.
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