Rupee sinks as Syria worries take the markets world over lower

Nothing seems to be going our markets’ way. At a time when the equities and the rupee have been trying to battle the existing woes, they have been thrown another challenge to contend with – Syria. Markets across asset classes around the globe had a rough day with emerging market currencies taking it on the chin. Rupee was among the worst hit losing over 3% in a single session and its worst ever single day fall. The partially convertible currency was down 1.94 today closing at 66.24 its weakest closing ever. However, Syria was not the only one to be blamed. The food security bill had an equal contribution to the currency’s weakness.

Equities did not want to feel left behind. Even the front line indexes closed over 3% apiece lower. Nifty is perched right on top of its long time 5280 support and Sensex was down close to 600 closing just below 18000. The sectors that cracked today may not raise any eyebrows but the entrants in the biggest losers list would definitely have instilled fear even in the minds of most optimistic bulls (if any such bull has still not been taken to the gallows). HDFC twins – HDFC and HDFC Bank were both down close to 8%. Both ICICI bank and Reliance have whittled down to Rs. 800. If such names have not been spared, then what happened to the rest of the market is best left to the imagination of the readers. 

The US markets have also opened sharply lower and Gold and Crude have registered handsome at the time of writing this. All major European indexes are also trading over 2%. With nifty registering a close at its 5280 support and in the light of what is happening in the global markets, tomorrow can take the nifty below the support. With a long term floor for the nifty cracking it is then anybody’s guess where the markets would likely go from here, though the direction is not too hard to predict.

Only hope that can keep our markets afloat is the expectation that the Govt will fire the last of the silver bullets it has, if at all any such bullet is left in the Govt’s repertoire. Fasten your seat belt folks; the journey ahead is going to be a very turbulent one.

----- Harish Sridharan