The Indian currency came under pressure in early trade on Tuesday as higher crude oil prices and continued foreign fund outflows pushed it below the 96-per-dollar mark.
At the interbank foreign exchange market, the rupee opened at 96.03 and weakened to 96.13 against the US dollar, down 16 paise from its previous close of 95.97 on Monday.
Forex traders said the rupee is facing pressure from firm oil prices and rising US nominal and real yields. These factors are attracting portfolio flows away from emerging markets, including India.
“We could see 96.50 in the coming days, and a clear break above 96.50 would open the door towards 98. Major support is now at 95.50. “The domestic picture remains a source of strength – industrial output grew 8 per cent in August – and the Reserve Bank has completed a large programme of bond sales this month with strong demand, which keeps the adjustment orderly,” said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.
Meanwhile, the dollar index, which measures the US currency against a basket of 6 currencies, stood at 101.23, up 0.04%.
Brent crude, the global oil benchmark, rose 1.51% to $106.87 per barrel in futures trade. The increase came amid concerns over possible disruptions to crude supplies through the Strait of Hormuz.
Domestic equities also weakened in early trading. The Sensex fell 503 points to 72,260.09, while the Nifty declined 151 points to 22,626.50.
Foreign Institutional Investors sold equities worth Rs 5,353.22 crore on a net basis on Monday, according to exchange data.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream LinkedIn | The Mainstream Facebook | The Mainstream Youtube | The Mainstream Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.