Indian Stock Market: The rupee fell 1 paisa to close at an all-time low of 83.72 (provisional) on Thursday due to strong demand for the US currency in the forex market and massive withdrawal of foreign funds. Forex traders said the fall in the domestic currency followed a sharp decline in Indian stock markets, driven by the government’s decision to raise the tax rate on capital gains. The local currency opened at 83.72 at the interbank foreign exchange market and touched an intra-day high of 83.66 and a low of 83.72 against the dollar during the session. It finally closed at an all-time low of 83.72 (provisional) against the US currency, down 1 paisa from its previous close. On Wednesday, the rupee fell 2 paisa to close at its all-time low of 83.71 against the US dollar. Anuj Chaudhary, research analyst at Sharekhan by BNP Paribas, said the local currency gained slightly during intra-day trade due to the perceived intervention by the Reserve Bank of India (RBI) and overall weakness in crude oil prices. “We expect the rupee to trade with a slightly negative bias due to weak global markets and fresh FII withdrawals. However, a weaker US dollar and fall in crude oil prices may support the rupee at lower levels. Intervention by the Reserve Bank may also support the rupee,” Chaudhary said. Market sentiment was impacted by the government’s decision to increase tax rates on capital gains, which put a huge pressure on the rupee and the equity market. In the domestic equity market, the 30-share BSE Sensex closed 109.08 points or 0.14 per cent lower at 80,039.80 and the Nifty closed 7.40 points or 0.03 per cent lower at 24,406.10. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.21 per cent at 104.17. Global oil benchmark Brent crude futures fell 1.79 per cent to $81.25 per barrel. Foreign institutional investors (FIIs) were net sellers in the capital market on Wednesday and sold shares worth Rs 5,130.90 crore, according to exchange data.
