Rupee dives 22 paise against dollar as COVID-19 takes toll on markets

THE INDIAN EXPRESS
FEBRUARY 20, 2020

As concerns over the economic fallout from the coronavirus outbreak and AGR dues of telecom companies continued to weigh over financial markets, the rupee declined by 22 paise to settle at 71.54 against the US dollar while the benchmark Sensex fell 161 points on Tuesday.

The 30-share Sensex and the Nifty settled with losses for the fourth straight session Tuesday, as the ongoing adjusted gross revenues (AGR) issue weighed on telecom and financial stocks.

The Sensex, which plunged over 400 points intra-day, closed 161.31 points lower at 40,894.38. The NSE barometer Nifty too staged a late recovery from the day’s low and settled at 11,992.50, showing a fall of 53.30 points or 0.44 per cent.

Asian markets, barring China, closed with heavy losses after warning by Apple and HSBC over the impact of coronavirus outbreak, also known as COVID-19.

The coronavirus epidemic, that emerged in central China, has now killed nearly 1,800 people and spread around the world.

“The market sentiment continued to be hit by COVID-19 after the issue of warning note from a key global MNC regarding the sales impact. Global weakness is expected to hurt domestic market as high valuation and low economic growth is not supportive,” said Vinod Nair, head of research at Geojit Financial Services. “The huge government dues to be paid by telecom sector will keep banking stocks volatile impacting the market performance,” he said.

Bharti Airtel was the biggest loser, with nearly 3 per cent drop in its share price. The Supreme Court on Monday refused to stop the telecom department from taking any coercive steps for recovery of dues from Vodafone Idea. Shares of Vodafone Idea, on Tuesday, tanked more than 16 per cent in intra-day trade due to rating downgrade on AGR dues and other issues of the company. The scrip closed 11.40 per cent lower.

Reliance Industries fell nearly 1 per cent after it announced consolidation of all its media and distribution businesses under flagship ‘Network18’. The three group entities namely Hathway Cable & Datacom, Den Networks and TV18 Broadcast — which would be merged into Network18 — rose by 20 per cent, 9.98 per cent and 14.7 per cent, respectively.

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