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Sensex Falls For Third Day, Rupee Slumps To 3-Month Low Against US Dollar

Public sector banks finally saw some buying today with Nifty PSU Bank ending in the green.

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Sensex Falls For Third Day, Rupee Slumps To 3-Month Low Against US Dollar

The rupee fell to a three-month low of 64.85 against the US dollar

Stock market indices declined for the third session in a row, with Sensex ending 71 points down at 33,703. Nifty edged 18 points lower to 10,360. On the other hand, the rupee fell sharply today to a three-month low of 64.85 against the US dollar. On Friday, the rupee had ended 30 paise lower at 64.21 against the US dollar on rising global crude prices and worsening trade deficit. The currency markets were closed on Monday. The rupee ended at 64.78 against the US dollar today, down 57 paise from previous close.

(Read: Rupee Falls To Fresh 3-Month Low Against US Dollar Today, Nears 65/USD)

Public sector banks finally saw some buying today with the sectoral index of Nifty PSU Bank ending 0.83 per cent higher, snapping six sessions of losing streak. But overall market sentiment continues to remain weak, say analysts.

"There has been a sense of negativity among market participants (after the fraud) and this has shattered the confidence for PSU banks," said Saurabh Jain, assistant vice president of research at SMC Global Securities

IT stocks attracted some buying today. Portfolio shuffling, together with expectations of stable earnings, is prompting investors to flock in the IT pack, said Jain of SMC Global Securities.

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Traders attributed higher demand for the US dollar from importers and banks and broad strength of the greenback for the rupee's decline today. Weakness in domestic stocks is weighing on the rupee, forex advisory firm IFA Global said in a note. 

The sentiment in banking stocks is also negative owing to developments around PNB scam and rising rates, it added. On a net basis, foreign investors withdrew Rs 895.79 crore from stock markets yesterday, according to a provisional data.

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