The Indian rupee continued to erode value against the US dollar falling 17 paise in the early trades as Sensex dropped 545 points amid a heavy sell-off in Indian equity markets on Monday. The rupee tumbled as much as 17 paise at 64.23 apiece US dollar at the interbank foreign exchange market on Monday after opening down 16 paise at 64.21 per US dollar. The market-wide sentiments have been on a negative note since after the Finance Minister Arun Jaitley had brought LTCG on equity over Rs 1 lakh under the tax net. With today’s depreciation in the domestic currency, the rupee had lost 54 paise against the US dollar in last three days. The Reserve Bank of India fixed the reference rate of the rupee at 64.0781 against the US dollar on Friday.
Indian equity markets have been under a heavy sell-off pressure since after the introduction of LTCG (Long-Term Capital Gain). The S&P BSE Sensex saw a vertical decline of 840 points on Friday under as shares of about 2,500 companies on BSE ended in red on the same day. Earlier on Friday last week, the rupee lost 3 paise at 64.06 against the US dollar.
Meanwhile today, India’s stock market extended the losses amid the global sell-off led by a downturn in sentiments followed by uncertainties over US job market, the introduction of a tax on LTCG on equity over Rs 1 lakh in India and subdued action ahead of RBI’s repo rate decision. The S&P BSE Sensex crumbled 545.95 points to hit a day’s low of 34,520.8 whereas NSE Nifty tumbled 173.8 points to hit a day’s low of 10,586.8, nearing its one-month low of 10520.1 as on 5 January 2018 on Monday. The global indicator of NSE Nifty, SGX Nifty Futures edged down 1.1% at 10,601.5 on the Singapore Stock Exchange.
In a major development in Budget 2018, Finance Minister Arun Jaitley introduced a tax on LTCG (Long-Term Capital Gain) on shares over Rs 1 lakh at 10%. Following which a knee-jerk reaction was observed in the Indian equities on Thursday as amid a heavy sell-off pressure, in the intraday trades on Thursday, BSE Sensex plunged 463.28 points to hit an 8-day low of 35,501.74.