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Rupee Tumbles 6% as India-US Trade Deal Stalls
16 Dec
Summary
- Indian Rupee lost 6% against USD due to stalled trade deal.
- Foreign investors have been net sellers since July 2025.
- Key Indian indices show growth despite currency dip.
The Indian Rupee has experienced a significant downturn, losing approximately 6% against the US Dollar year-to-date. This depreciation is largely linked to the ongoing delay in finalizing the India-US trade deal. Consequently, foreign institutional investors (FIIs) have maintained a cautious stance, continuing their trend of being net sellers in the Indian market since July 2025. This cautious sentiment, however, has not fully dampened the performance of the domestic stock market.
Despite the Rupee's weakness, key Indian benchmark indices have demonstrated resilience and growth. The Nifty 50 has climbed nearly 9%, the BSE Sensex has surged by approximately 8%, and the Bank Nifty index has recorded an impressive increase of over 15.50% year-to-date. These gains indicate underlying strength in specific sectors and the broader market's ability to absorb currency fluctuations.
Optimism is returning as both the US and Indian governments are issuing highly positive indications regarding the imminent finalization of the trade deal. Once concluded, this agreement is widely expected to catalyze a fresh bull trend on Dalal Street, potentially attracting renewed investment and boosting market sentiment. Investors are keenly awaiting this development to signal a new phase of growth.
