The Indian currency, i.e. the Indian rupee fell by 27 paise to trade at 65.81 in opening trade against the dollar.
It was trading 31.8 paise to 65.751 down per dollar on Friday. The time was around 9.49 am.
Lower opening in the domestic equity market, and strong demand for dollar from banks and importers weighed on the local currency.
The rupee dropped and the dollar also weakened against other key global currencies amidst the global economic slowdown worries.
On Thursday, the rupee sank by 27 paise at a 2-year low of 65.54 per US dollar following the demand for American currency from importers and banks.
The BSE Sensex crashed by 476.38 points, to 27,131.44 in early trade.
Recent stock market crash of china is proving to be a lucrative gain for India.
Regulatory data shows that the inflows recorded for India are Rs 53.19 billion in July after 2 months of outflows. Meanwhile, under the Shanghai-Hong Kong Stock Connect, northbound investment saw fund outflows of nearly 47 billion yuan since early July.
The head of Asian equities at Manulife, said that the joy of the China A-shares markets was deemed unsustainable. This increased its overweight position on India as well as on the other hand, cut China to neutral from overweight.
Investors of 2014 in India pulled back this year over various concerns regarding slow pace of reforms, taxes and preferring markets such as Taiwan, China and South Korea.
Now, fears for Beijing’s interventions and volatility of Chinese stock market are overriding such concerns and driving them again back to India.
This year the Shanghai Composite surged 60% until the saturation or peak at June 12. Since then, it lost 27%.
The Sensex dropped almost 4.1% from the very beginning of the year 2015 until a trough with Chinese peak, has climbed to nearly 5.9% since then.
At an Australian fund manager, two sources declined to name the company or be identified, said that the fund cut the Indian exposure in favor of China and is now shifting back.
They said that, it has reduced its holdings on various concerns about volatility in market and surged its allocation to India.
The head of Asian equities at Manulife says that for Manulife, any increase in the China holdings would require less government intervention.
He adds that the investors also want to assure that the monetary stimulus measures and the central bank’s fiscal measures are working.
Investors in India remain frustrated about service tax and the passage of a goods, delivery of promised infrastructure and slow progress on land acquisition reform.