By the end of the day, the INR declined 6 paise to close at 83. 50 (provisional) for the U.S. dollar on Tuesday. This was due to the fact that the dollar was firming up in the international market as well as increasing crude oil prices in the international market, which caused the INR vs USD rate to fall. The external factors, coupled with a softer bearish domestic equities market and sustained FII selling affected investors’ sentiment, the forex traders observed.
The rupee also fell to a record at the interbank foreign exchange market opening at 83.50 with an intraday high of 83.47 in the INR vs USD rate, and the lowest being 83.56 against the US dollar during the session. Finally, it stabilised at 83.50 (provisional) thus erasing a six paise gain recorded in the previous trading session. In the prior trading session, the rupee declined by 10 paise and settled at 83.44 to the US dollar.
The dollar index that measures DXY or greenback against an average of six currencies of its choice stood at 0.9 percent higher at 105.99. At the same time, the international Brent crude futures were at 0.76 percent higher amount of $87.26 per barrel due to the high world crude prices.
The domestic equity market experienced a negligible fluctuation; BSE Sensex, a 30-share index, fell by 34.74 points, or 0.04 percent and finally ended at an overall market capitalization figure of 79,441.45 points. Likewise, the larger Nifty of the National Stock Exchange (NSE) finished 18.10 points, or 0.07 percent, lower at 24,123.85 points. This comes through exchange data, which show that FIIs were net sellers in the capital markets on Monday and sold shares worth Rs 426.03 crore.
The current or the given scenario helps to understand how the global economic condition indirectly influences the Indian financial market. Higher crude oil prices and the strong dollar put pressure on the value of the rupee, which in turn has increased the prices of imports and possibly the inflation rates. Also, the weak performance of local shares and the emigration of overseas funds are areas affecting investor confidence.
Check here for the latest updates in Hindi!