The Indian rupee fell to a new record low of 85.92 against the US dollar on Thursday morning, driven by a stronger American currency, rising US bond yields, and surging crude oil prices. The forex markets opened with the rupee at 85.94 before slightly recovering to 85.92. Meanwhile, Indian equity markets also faced pressure, with benchmark indices Nifty and Sensex trading lower as foreign investors continued to pull out funds amid caution over the upcoming earnings season.
Sensex dropped over 284 points, while Nifty shed at least 86 points in morning trade, with major stocks such as Tata Motors, SBI, Sun Pharma, and Zomato declining. On Wednesday, foreign investors sold equities worth Rs 3,362.18 crore. Additionally, HSBC downgraded its rating for Indian markets to “neutral” on Thursday, citing concerns about slowing growth and overvalued equities. The bank also reduced its year-end 2025 Sensex target by 5% to 85,990.
Economic sentiment remains subdued due to rising US bond yields and expectations of fewer rate cuts by the Federal Reserve, as noted by Vinod Nair of Geojit Financial Services. India’s economic growth is projected to slow to 6.4% in fiscal 2024-25, marking a four-year low, according to government data released earlier this week. The combination of global and domestic factors continues to weigh on the rupee and market performance.
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