The market has opened with big gap down on carnage across the globe as investors worried over Chinese economic growth. The Sensex fell 883.55 points or 3.23 percent to 26482.52 and the Nifty dropped 244 points or 2.94 percent to 8055.95.
The Indian rupee has touched a fresh two-year low in early trade Monday following sharp sell-off in global markets as investors worldwide worried about Chinese economy.
The currency has opened at 66.47 per dollar, the lowest level for the first time since September 2013, down 65 paise compared to 65.83 a dollar seen at Friday’s close.
Agam Gupta, StanChart Bank feels the USD-INR will open higher in-line with other emerging market currencies.
He expects the USD-INR to open at Rs 66.25-66.30/USD and trade in a Rs 66.10-66.60/USD range.
“We will keep an eye on supply of USD from local government banks but the move in global markets will remain key for the pair at the moment,” Gupta said.
The dollar tumbled against the euro and the yen as strikingly amid China growth worries and as hopes dim that the Federal Reserve will raise US interest rates next month.
Major markets around the world suffered bruising losses as investors worldwide became increasingly concerned about Chinese economy.
All of the main US indices closed down more than 3 percent on Friday, the fourth consecutive day of falls. The Dow Jones Industrial Average closed down 531 points, or 3.1 percent, to 16,460 – the S&P 500 lost 3.2% to 1,971 and the Nasdaq closed down 3.5% to 4,706.
Major markets around the world also suffered bruising losses as new data suggested Chinese factory activity had slowed to levels last seen in 2009 and added to investors’ fears about the country’s economy since Beijing devalued its currency last week.
US oil prices also crashed down to below $ 40 a barrel a one point, a level not seen since the financial crisis.
The dollar fell to a two-month low against the euro and added to speculation that the Federal Reserve may now not raise US interest rates next month, as had been widely expected by economists.
The Dow Jones index has lost about 10% from its record closing high on 19 May, mean it is entering a correction – a fall of at least 10% from a recent peak. The Dow has not fallen into correction territory since October 2011. Friday’s fall takes the Dow to its sharpest weekly decline in four years.
Stocks had already fallen sharply in Europe, Asia and Australia. In London, the FTSE 100 closed down 180 points, or 2.8%, to 6,187 – the lowest it has been this year and the biggest one-day fall since October 2014. The UK index closed down for nine straight sessions – its longest losing streak since 2011.
The FTSE 100 has fallen by 5.6% this week, Last week, the Dow Jones in the US fell 6%, while the UK’s FTSE 100 posted its biggest weekly loss this year of 5%.
Investors are concerned about a slowdown in China and the knock-on effects for the global economy.
Both France’s Cac 40 and Germany’s Dax indexes lost 7% of their value last week.