The rupee had sacrificed its initial gains and fell 11 paise at the start of the day at 91.79 (provisional) against the US dollar on the sustained outflow of the foreign funds and weak support of a low dollar index.
According to Forex market participants, the domestic currency started off on a positive footing, and this was facilitated by a drop in the dollar index and a general expectation in a possible trade agreement with Europe. The rupee had first enjoyed the better global indicators and some reduction of the risk aversion. But the continued selling of the currency by foreign investors and the continued geopolitical uncertainties continued to inhibit the upward trend of the currency and ultimately drove this currency into the negative tangents.
The rupee started off better at the interbank foreign exchange market at 91.60 per dollar and it went further to reach an intraday high of 91.50. The profits were not long lasting. It changed gears later in the session and the local currency climbed back to a low of 91.79 intraday and a 11 paise fall against its last close.
In the meantime, the dollar index that determines the performance of the greenback against a basket of six major world currencies fell by 0.07 per cent at 96.14, which is of little help to emerging market currencies. The prices of crude oil were also kept at lower levels as the Brent crude futures fell to USD 67.28 per barrel by 0.43 per cent, thus relieving some burden on the import bill.
Domestic equities did well as compared to the currency market. They were up 487.20 points as the benchmark Sensex ended the day at 82,344.68, and the Nifty, the two-thirds index, rose 167.35 points to close at 25,342.75, which is an indication of better investor sentiment in the equity space despite the weak rupee.