India’s benchmark stock index, the S&P BSE Sensex, slipped 1.22 percent during Monday’s trade, closing at 24,893.81 points -- its lowest level in 15 months. The much larger Nifty index also fell 1.26 percent, closing down 96 points, as a weak rupee and the slowdown in China continued to rattle investors.
“The outlook is (still) negative, but the market is oversold,” Alex Mathews, head of research at the Indian financial services company Geojit BNP Paribas, told the Times of India. “Because of the absence of any positive triggers, the market could remain subdued or trade sideways.”
Moreover, disappointing U.S. jobs data for the month of August, which dashed hopes of a rate hike by the U.S. Federal Reserve, also impacted the Indian rupee. The domestic currency continued to decline against the dollar Monday, hitting a two-year low of 66.83 to the dollar.
“The rupee has depreciated about 5 per cent so far this year, but it is much better compared with those in countries like Brazil, Mexico and Indonesia, which have seen far more volatility,” Alka Banerjee, of S&P Dow Jones Indices, told the Economic Times, adding that a further depreciation was expected if the markets continued to perform poorly.
Earlier Monday, following a surprise downward revision of China’s GDP, Asian shares closed mostly lower. China’s Shanghai Composite index closed down 2.5 percent, while Hong Kong’s Hang Seng index closed 1.2 percent in the red.