The Indian rupee slid to an all-time low against the US dollar on Friday, on worries that the tariffs imposed by Washington might hit growth in the world's fifth-largest economy.
The rupee fell to a record of 88.3075 versus the greenback during intraday trading before settling 0.65 per cent lower to 88.1950, its biggest one-day loss since May.
That also marked the first time the currency breached the 88-rupee-per-dollar mark.
Friday's decline also means the rupee has fallen against the dollar for the fourth straight month.
The US on Wednesday doubled its tariffs to India to 50 per cent – the highest for any Asian country – a move aimed at punishing New Delhi for Russian oil imports and escalating an economic war with global ripple effects.
That has caused a lot of concern for India's domestic economy, South Asia's largest, with consumers and businesses wary of its ill effects.
"The rupee’s sharp volatility against the US dollar in recent months – in the backdrop of continuing geopolitical uncertainties – is set to dent the earnings of some sectors by up to 250 basis points in fiscal 2026," according to a recent note from analysts at Crisil Ratings.
The Mumbai-based firm had also predicted that the Indian currency would settle at about 88 rupees by the end of India's fiscal 2026 year, which ends on March 31.
"The extent of impact will depend on the exposure to foreign trade, ability to pass on the cost increase and hedging practices. There might also be player-specific impact across sectors based on the extent of unhedged foreign currency debt exposure," they added.
India's stock market benchmarks also felt the brunt of the tariffs. The Bombay Stock Exchange Sensex finished 0.34 per cent lower to post a 1.7 per cent decline for August, while the Nifty 50 retreated 0.3 per cent for a 1.4 per cent monthly drop.
Analysts expect the Reserve Bank of India to intervene in order to support the rupee, although it has not given any indication.
"Domestic support from the RBI and government could bolster local equities," said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
Indian companies have already made moves to avoid the US tariffs. Players in its vast gold and jewellery sector, for instance, are now pivoting towards bottom line-friendly manufacturing and exporting hubs such as the Gulf in order to offset the effects of the high levies.
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How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
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Manchester United 1
Mata 11'
Chelsea 1
Alonso 43'
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Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
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- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
