On Wednesday, the rupee witnessed a 3-paise depreciation, reaching 83.15 against the US dollar, influenced by a robust dollar performance globally and substantial sell-offs in the domestic stock markets. Despite this, the infusion of foreign funds into domestic equities and a decline in global crude oil prices provided some resilience to the domestic currency, according to forex traders.
Opening at 83.13 at the interbank foreign exchange, the rupee faced a further dip to 83.15 against the dollar, marking a 3-paise loss compared to its previous close. Tuesday had seen the rupee sliding by 26 paise to settle at 83.12 against the US dollar. Meanwhile, the dollar index, reflecting the greenback’s strength against six major currencies, showed a 0.08% uptick, reaching 103.19 on Wednesday.
Analysts attribute the persistent strength of the US dollar to safe-haven demands, driven by concerns over disruptions in global trade through the Red Sea route. While Brent crude futures, the global oil benchmark, experienced a 0.47% decline, reaching $77.92 per barrel, the impact on the rupee was somewhat mitigated.
In the domestic equity market, the 30-share BSE Sensex witnessed a 0.98% decline, trading at 72,409.40, reflecting a drop of 719.37 points. Simultaneously, the broader NSE Nifty also experienced a 1.06% decline, with a loss of 233.10 points, settling at 21,799.20.
Foreign Institutional Investors (FIIs) displayed a positive trend in the equity market on Tuesday, being net buyers with shares worth Rs 656.57 crore, as per exchange data. This influx of foreign funds provided a counterbalance to the prevailing market challenges.
As the rupee navigates these fluctuations amid global economic dynamics, continued vigilance over key factors such as foreign fund movements, crude oil prices, and global trade disruptions remains crucial for stakeholders and traders in the Indian financial markets.
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