The strengthening American currency, soaring US bond yields and rising crude oil prices led to a third straight session in the red for the Indian rupee on Thursday morning. The rupee hit a new record low of 85.92 against the US dollar.
Thursday morning, forex markets opened with the rupee at a historic low of 85.94 before improving slightly to 85.92.
In the Indian equity markets, benchmark indices Nifty and Sensex were bearish in morning trade as the outflow of foreign funds continued. The impending earnings season saw local investors more cautious about the market.
Sensex dropped more than 284 points and Nifty shed at least 86 points on Thursday morning, with Tata Motors, Zomato, SBI, L&T, Sun Pharma, NTPC, Power Grid, and Bajaj Finance, all lagging.
As per exchange data, foreign investors offloaded Rs 3,362.18 crore worth of stock on Wednesday.
HSBC pruned its rating on India markets to “neutral” on Thursday citing growth slowdown and bloated valuations in equities. It also cut the 2025 year-end target for Sensex by 5 per cent to 85,990.
“The near-term sentiment is likely to be subdued due to the rise in US bond yield and fear of fewer rate cuts by the Fed,” said Vinod Nair, head of research at Geojit Financial Services, earlier this week.
The economic growth rate of India is now estimated to hit a four-year low of 6.4 per cent in fiscal 2024-25, according to government data on Tuesday.
