Indian Rupee settled barely up against the US Dollar on Tuesday to close at 85.33 (provisional), drawing at 3 paise, as positive risk sentiment guided the domestic currency. The development came on the back of the lessening of trade tensions between the United States and China on the back of news that officials from both countries agreed to roll back previous tariffs and embarked on a 90-day negotiation period. However, the rupee trimmed most of the initial gains as fuelled by an increase in crude oil prices, a stronger dollar, and profit booking in Indian equity markets.
It opened at 84.70 in the interbank foreign exchange market and moved in a range of 84.62 (a high) and 85.48 (a low) to eventually close at 85.33, 3 paise higher than its end of the last day at 85.36. In addition, the forex market was not open on Monday because of Buddha Purnima.
The index that tracks the greenback against six of the world’s major currencies, the US Dollar index, declined by 0.20% to 101.58, coming to the rescue of the emerging market currencies such as the rupee. In the meantime, Brent crude oil prices rose by 0.42% to $65.23 per barrel, and this increased concerns on India’s import bill as well as a widening trade deficit.
On the home front of equity, markets recorded a steep correction from Friday’s rally. The BSE Sensex slumped 1,282 points (1.55%) to finally end at 81,148, while the Nifty50 dropped 346 points (1.39%) to close at 24,578. The sell-off ate away close to Rs 1.51 lakh crore in investor wealth, reducing the market capitalization of BSE-listed companies to Rs 431.05 lakh crore.
From perusal of the exchange data, foreign institutional investors (FIIs) had been a net buyer on Monday, buying equity worth Rs 1,246.48 crore, but that momentum failed to carry through to Tuesday’s session.
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