Rupee Depreciates To 74.23 Against Dollar Amid Weaker Domestic Equities
The rupee depreciated by four paise on Tuesday, June 29, to settle at 74.23 (provisional) amid weaker domestic equities and a stronger American currency, which weighed on the foreign exchange market sentiment. At the interbank foreign exchange market, the domestic unit opened at 74.26 against the dollar and hovered in the range of 74.20 to 74.28 during the day. In an early trade session, the local unit weakened by seven paise to 74.26 against the greenback. It finally settled at 74.23 today against its previous close of 74.19.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.10 per cent to 91.97.
''Given liquidity boosting measures will have a negative impact on the fiscal figure and slippage is likely to remain a big concern. Hence, rather than a welcoming move, we are seeing a slightly depreciating move in the rupee....On the flow side, FII seems booking their profit as indices retraced from an all-time-high in the recent days ahead of uncertainty on the COVID variant,'' said Mr Amit Pabari, MD, CR Forex.
''RBI's unexpected move in their forex book towards month-end could call the volatility back in the USDINR pair. Overall, additional fiscal plan, stronger dollar demand and variant concern could pressurize on the rupee in the near term. Broadly, we are expecting that it will be trading in the range of 73.50 to 74.50 in the near term before the above triggers take it towards 75.00-75.20 levels over the medium term,'' he added.
On the domestic equity market front, the BSE Sensex ended 185.93 points or 0.35 per cent lower at 52,549.66, while the broader NSE Nifty fell 66.25 points or 0.42 per cent to 15,748.45.
“The market remained in a narrow range but with a negative bias. Weakness in the Asian markets, consistent selling pressure from FIIs since the last three days, and steadiness in the prices of Brent crude at 75 could be the few reasons to keep the market within the trading range,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
''Today, we witnessed weakness in financials, metals, and auto companies, which is an indication of buying breadth is poor. The activity was more into FMCG and Pharmaceutical stocks. As the market is in the trading range, we need to be buyer between 15720/52450 and 15670/52300 levels,'' added Mr Chouhan.
According to exchange data, the foreign institutional investors were net sellers in the capital market on June 28 as they offloaded shares worth Rs 1,658.72 crore. Brent crude futures, the global oil benchmark, declined 0.24 per cent to $ 74.50 per barrel.
