The Indian rupee traded at 71.82 against the US dollar, down 16 paise compared to Thursday's close as increasing fears of coronavirus impact on global economic growth raised safe haven buying in the US dollar.
Technology stocks gained strength even as benchmark indices lost ground on February 24, as the rupee continued to depreciate and hit seven-week low.
In fact, the Nifty IT index rose 0.6 percent whereas the benchmark Nifty50 fell 1 percent. In last three weeks, the index climbed 4 percent.
Infosys, Tata Elxsi and Tech Mahindra were major gainers in the index, up 1-1.5 percent, followed by TCS (up 0.42 percent) and Wipro (up 0.2 percent).
Any fall in currency is always good for technology or any other company that exports services/goods and deals in US dollar. In fact, the decline in currency supports these companies margin.
The Indian rupee traded at 71.82 against the US dollar, down 16 paise compared to Thursday's close as increasing fears of coronavirus impact on global economic growth raised safe haven buying in the US dollar.
The currency hit a day's low of 71.90 a dollar, the lowest level since January 6, 2020. It fell more than 100 paise from current year's lowest closing level of 70.81 on January 15.
"The rupee is expected to eventually move towards 72 as support from FIIs is missing in equity markets. However, a rupee move is likely to be slow as the debt market segment has started seeing some FII inflows post the recent monetary policy," said ICICI Direct.
"Safe haven buying in the US dollar has continued. The Dollar Index has moved up to 99 and is expected to reach 102 in the coming weeks. This may keep rupee appreciation in check," it added.
Globally markets worried about rising fears of the novel coronavirus as it already crossed the death toll of 2,500 in China itself, where it started first, with more than 77,000 infected cases so far.
The most fearful part is that the virus has been spreading in other countries as well, including South Korea which reported the maximum cases outside of China, at 763 with seven people death. The government in South Korea raised the coronavirus alert to its highest level after sharp increase in infected cases.
Hence, International Monetary Fund Managing Director Kristalina Georgieva said the spread of China's coronavirus outbreak to more than 25 countries could put global economic recovery at risk.Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.
