New Delhi — The Indian rupee plunged to an unprecedented level on Wednesday, breaching the 90-per-dollar mark for the first time amid weak trade flows, subdued portfolio inflows and mounting uncertainty over the India–U.S. trade agreement.
The currency dropped to a new all-time low of 90.13 against the U.S. dollar, slipping past Tuesday’s record of 89.9475. Persistent pressure throughout the session kept the rupee on a downward trajectory.
The sharp depreciation weighed immediately on domestic equities. The Nifty fell below the psychologically important 26,000 level, while the Sensex declined nearly 200 points in early trade as investors grew increasingly concerned about inflation risks and reduced foreign investor participation.
Analysts said market sentiment remained tense as traders looked for any signs of currency stabilization and clarity on ongoing trade discussions with Washington. “The rupee depreciation will halt and even reverse when the India–U.S. trade deal materialises. This is likely this month. A lot, however, will depend on the details of the tariffs to be imposed on India as part of the deal,” they noted.
The broader market opened on a subdued note. The Sensex edged up only 12 points to 85,151 at the start of trade, while the Nifty slipped 18 points to 26,014. Early losers included Hindustan Unilever, Titan, Tata Motors PV, NTPC, BEL, Trent, Bajaj Finserv, Kotak Bank, Ultratech Cement, Maruti Suzuki, L&T, Power Grid and ITC.
Analysts warned that continued rupee weakness has become a critical factor driving the recent drift in equity indices. “A real concern now, which has contributed to the slow drifting down of the market, is the continued depreciation in the rupee and fears of further depreciation since the RBI is not intervening to support the rupee,” they said.
“This concern is forcing FIIs to sell despite the improving fundamentals of rising corporate earnings and strong rebound in GDP growth,” they added. (Source: IANS)
