Friday’s mayhem following fall in the rupee value to an all-time low amid concerns over the continuity of US Fed’s stimulus programme washed out all initial gains of the benchmark S&P BSE Sensex.
It witnessed a decline of 191 points, extending losses for the fourth straight week.
The Bombay Stock Exchange 30—share barometer resumed the week higher on the back of an increase in exports and hopes of additional measures to support the rupee.
Commerce Secretary S R Rao said exports grew 11.64 per cent to $25.83 billion in July, while imports declined 6.2 per cent to $ 38.1 billion, leaving a trade deficit of $12.2 billion.
It also ignored the data, which showed that inflation based on the Wholesale Price Index (WPI) shot up to a five—month high of 5.79 per cent from 4.86 per cent in June.
Sensex then also rallied further to touch a high of 19,392.56 on Wednesday as the government on Tuesday increased import duty on gold, silver and platinum to 10 per cent to stem the rupee fall.
The S&P Sensex crashed 769 points on Friday, the most in 4 years, as the rupee plunged to an all—time low amid fears the government may move to a capital—control regime to curb forex volatility and narrow CAD.
This was the largest point—wise fall since July 6, 2009, when the index plunged by 869.65 points.
The Sensex finally ended the week down by 191.16 points or 1.02 per cent at about 1—1/2—month low of 18,598.18. It has tanked by 1,551.67 points or 7.70 per cent in straight four—weeks of fall.
The broader CNX Nifty of NSE also dipped by 57.80 points or 1.04 per cent to end at 4—month low of 5,507.85.
The rupee fell below the 62 level for the first time, plummeting to 62.03 against the dollar on Friday, after the RBI announced additional steps on Wednesday to restrict foreign—exchange outflows and gold imports.
“The fear (among foreign investors) is that recent RBI measures may bring capital control measures back in a much bigger way. The markets crashed mainly because of this,” said Gautam Sinha Roy, VP—Equities, Motilal Oswal Securities.
To curb dollar outflows, the RBI on August 14 announced stern measures, including curbs on Indian firms investing abroad and on outward remittances by resident Indians.