Indian Shares Extend Losses As Rupee Hits New Low

Indian shares recouped early losses to end marginally lower on Wednesday. A cautious undertone prevailed as Ukraine peace talks stalled, and uncertainty prevailed over the U.S.-India trade deal.

A weakening rupee and continued selling by foreign investors also weighed on sentiment ahead of the RBI’s monetary policy meeting due this week.

The Indian rupee hit a historic low of 90.30 against the U.S. dollar today but the government seemed unconcerned about the decline.

Speaking at a CII event, Chief Economic Adviser V Anantha Nageswaran indicated that the government is not losing sleep over declining rupee and that the recent decline has not impacted inflation or exports. He expressed optimism about the rupee’s potential recovery in the following year.

The benchmark BSE Sensex hit an intraday low of 84,763 before recovering to close down 31.46 points, or 0.04 percent, at 85,106.81 – extending losses for a fourth consecutive session.

The broader NSE Nifty index ended down 46.20 points, or 0.18 percent, at 25,986, after having fallen to a low of 25,891 earlier.

The broader mid-cap and small-cap indexes on the BSE lost 1 percent and 0.4 percent, respectively.

The market breadth was weak on the BSE, with 2,682 shares falling while 1,481 shares advanced and 153 shares closed unchanged.

The losses were widespread, with Adani Ports, Larsen & Toubro, Bajaj FinServ, TMPV, SBI, NTPC, Mahindra & Mahindra, Titan Company and BEL falling 1-2 percent.

IT stocks and private banks attracted buying, with TCS, ICICI Bank, Infosys, HDFC Bank and Axis Bank all rising around 1 percent.

Globally, Asian markets ended mixed as a cryptocurrency rebound lost steam and focus shifted to key U.S. economic data and upcoming central bank decisions. European stocks were flat to higher in early trade.

Oil prices rebounded from losses in the previous session after high-level talks between Russia and the United States over a U.S.-proposed peace plan for the Russia-Ukraine conflict ended late on Tuesday without a breakthrough.

The dollar headed for its ninth straight decline and gold prices were little changed above $4,200 per ounce ahead of an anticipated rate cut at next week’s FOMC meeting.