Key Highlights:
- Rupee Slips: The Indian rupee declined by 6 paise, settling at 85.74 per dollar due to high crude oil prices and foreign fund withdrawals.
- Market Volatility: The rupee experienced fluctuations, trading between 85.65 and an all-time low of 85.84 during the day.
- Global Factors: A strong US dollar and rising Brent crude prices impacted the rupee negatively, while domestic stock market gains provided partial support.
- FII Selling Pressure: Foreign Institutional Investors (FIIs) sold shares worth ₹1,491.46 crore, intensifying pressure on the rupee.
- Market Trends: The BSE Sensex rose 234.12 points to close at 78,199.11, while the Nifty gained 91.85 points to end at 23,707.90.
Rupee Declines Amid Crude Surge and FII Outflows
Mumbai: The Indian rupee ended Tuesday’s session on a weaker note, closing at 85.74 per US dollar, down by 6 paise from the previous close of 85.68. Persistent pressure from high crude oil prices and a significant withdrawal of foreign funds overshadowed an improvement in domestic equities, leaving the currency vulnerable.
Trading Day Overview
The rupee began the day at 85.77 in the interbank foreign exchange market and fluctuated within a tight range, reaching a high of 85.65 and a low of 85.80. Traders noted a brief recovery fueled by a slight dip in the US dollar index and gains in the domestic equity markets, which provided some relief.
On Monday, the rupee had closed stronger by 11 paise at 85.68 per dollar. However, Tuesday’s session saw the rupee touch an all-time intraday low of 85.84 per dollar before stabilizing slightly.
Factors Driving the Decline
- Crude Oil Prices: Brent crude, the global oil benchmark, rose by 0.90% to $76.99 per barrel, intensifying concerns over India’s import bill and trade deficit.
- Foreign Fund Outflows: FIIs remained net sellers, offloading shares worth ₹1,491.46 crore in the capital market, putting additional pressure on the currency.
- Dollar Strength: Despite a slight dip, the dollar index, which measures the greenback against six major currencies, remained strong at 108.22, signaling ongoing global dollar demand.
Stock Market Snapshot
The domestic equity markets offered some respite, with the 30-share BSE Sensex climbing 234.12 points to close at 78,199.11. Similarly, the NSE Nifty ended the day with a gain of 91.85 points, settling at 23,707.90.
Outlook for the Rupee
Market experts predict continued volatility for the Indian rupee, given the ongoing challenges posed by global oil prices and foreign fund movements. With the US Federal Reserve’s policy stance and crude oil dynamics remaining key factors, traders will closely watch these developments in the coming days.
