The stock markets traded in negative territory on Wednesday, going back on the gains made in the previous trading session. As of 10:35 AM, the BSE Sensex stood almost 500 points lower and tested the 71K mark at 71,068.82, while the NSE Nifty50 traded at a loss of 131.10 points at 21,612.15.
The rupee fell 4 paise to hit 83.12 against the US dollar in early trade on Wednesday, after domestic equities traded in negative territory. Forex traders noted that the strength of the American dollar and surged crude oil prices impacted investors’ sentiments. At the interbank foreign exchange, the domestic unit opened at 83.11 against the American currency and hit a low of 83.12 and a high of 83.09 in initial trade. In the last trading day on Tuesday, the rupee depreciated 8 paise to settle at 83.08 against the US dollar.
Background
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The stock markets exhibited volatility on Wednesday morning. After experiencing a roller coaster of losses and gains in the first two trading sessions in the week, the markets again reversed their rally and traded in red on Wednesday morning.
As of 10:04 AM, the markets continued to erase the gains from yesterday’s session. The Sensex stood lower by more than 500 points and dropped closer to the 71,000 mark to trade at 71,030.95, while the Nifty slipped over 100 points to touch 21,618.30.
Banking regulator, the Reserve Bank of India (RBI), is expected to release a detailed set of Frequently Asked Questions (FAQs) in the week, with regard to the concerns surrounding the Paytm Payments Bank Ltd (PPBL) issue. Highlighting the need for addressing customer concerns, RBI Governor Shaktikanta Das, said, “Customer interest and depositors’ interest is uppermost for us.”
In the last trading session on Tuesday, the two key equity benchmarks, Sensex and Nifty, settled in green. The S&P BSE Sensex climbed almost 500 points and closed at 71,555. On the other hand, NSE Nifty50 settled the session at 21,743, up 127 points.
Among the domestic macroeconomic indicators expected in the week are inflation, manufacturing, and food index data. Inflation data for the U.S. is also anticipated to be released in the week.
Former RBI Governor C Rangarajan also noted on Tuesday that for India to become a developed nation by 2047, the country needs to grow at the annual rate of 7 to 8 per cent. “I would say that the real growth between 7 per cent and 8 per cent will take it closer to the developed economy, because the developed economy by definition shows per capita income of USD 13,000 or more. India’s per capita income is now at USD 2700. That means per capita income will have to increase by five times,” he said, in conversation with PTI.