With the rupee plunging to record lows the misery for investors in India is just piling. This is particularly so for foreign portfolio investments whose value has been dented by 23.5 per cent depreciation in the Indian currency against the US dollar over the past 11 months.
What is worrying is the market perception that the rupee is yet to see a bottom. Foreign investors, the main driver of the domestic stock market, will not pump in money unless the rupee stabilises and they are assured the government is taking measures to revive growth.
“The volatile rupee is the new joker in the pack,” said equity salesman Kevin D’Souza. “Although the rupee’s fall makes buying shares cheaper for foreign investors, no one wants to be caught by another slide in the rupee.”
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