The rupee nosedived to a record low on Wednesday after a sustained demand for dollars from oil importers and banks while the equity markets witnessed a rollercoaster ride as investors turned cautious ahead of the release of the minutes of the US Federal Open Market Committee meeting.
This meeting is likely to give an indication of the timing of withdrawal of the Fed’s multi-billion-dollar monthly asset purchase programme. The rupee tanked to an all-time low of 64.54 to the dollar in intra-day trade, before closing the day at 64.11 per dollar, a rise of 86 paise from the previous day’s close of 63.25.
The equity markets, which opened the day on a buoyant note after the latest Reserve Bank measures to ease liquidity in the banking system, lost momentum once the rupee started weakening. After opening the day higher with a gap of almost 300 points, the BSE’s Sensex crashed over 734 points in intra-day trade, slipping below the psychological 18,000 level as risk-averse foreign institutional investors cut their exposure to the Indian markets further by offloading shares worth `792.11 crores, provisional data from stock exchanges showed.