Rupee, markets fall after India says it ‘neutralised' attempts to engage military targets
The Indian rupee, equities and bonds dropped in late afternoon trading on Thursday after India said it 'neutralized' attempts by Pakistan to 'engage' several military targets in its northern and western regions on Wednesday night and early Thursday.
Indian armed forces targeted air defense radars and systems at a number of locations in Pakistan on Thursday, the government said in a statement. Pakistan's military said that it had shot down 25 Indian drones.
The rupee declined to a low of 85.59 per dollar, down 0.8 percent on the day while the benchmark 10-year bond yield rose over 7 basis points from its day's low to 6.3807 percent.
India's benchmarks NSE Nifty 50 and BSE Sensex extended losses to slip 0.5 percent and 0.4 percent, respectively, hovering near their session lows.
'This is a knee-jerk reaction from the markets just as we had expected due to escalation of border tensions,' said Sandeep Bagla, chief executive officer at Trust Mutual Fund.
The Nifty volatility index has risen in 10 of the 11 sessions since the Islamist militant attacks on Hindu tourists in Kashmir last month. The fear gauge rose to 21.48 in intraday trade, the highest since April 9.
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