Paring Initial Losses, Rupee Settles Flat To 73.34 Against Dollar Amid Subdued Trend In Domestic Equities

Paring its early losses, the rupee closed almost flat, up by one paise against the US dollar on Tuesday, May 11, to 73.34 amid a subdued trend in domestic equity markets. At the interbank foreign exchange market, the domestic unit opened lower at 73.47 against the dollar and further declines to the day’s low of 73.53. The local unit later cut losses and closed at 73.34, witnessing a rise of one paisa over its previous close of 73.35 against the American currency. In an early trade session, the rupee fell 18 paise to 73.93 against the dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.07 per cent to 90.14. According to forex traders, concerns over the rising COVID-19 cases weighed on investor sentiment.

”USDINR  has appreciated to 73.50  as the virus is causing some strain bringing equities down as also the rupee. However, flows in the pair should continue and every uptick should bring about some good selling. RBI was the only buyer of the pair yesterday and did not allow an appreciation beyond 73.30 of the rupee. Importers to buy around 73.30 and exporters to sell around 73.60 for near term,” said Mr. Anil Kumar Bhansali, Head of Treasury, Finrex.

On the domestic equity market front, the BSE Sensex closed 340.60 points or 0.69 per cent lower at 49,161.81, while the broader NSE Nifty slipped 91.60 points or 0.61 per cent to 14,850.75.

”On Tuesday, due to extremely weak global market conditions, the Benchmark index Nifty / Sensex witnessed selling pressure, the Nifty/ Sensex shed over 90/ 340 points. Today, the index opened with a gap down but post weak opening the index recovered sharply and through the day it was trading between 14800 -14900/48990-49300  price ranges,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

According to provisional data, the foreign institutional investors (FIIs) remained net buyers in the capital markets, as they purchased shares worth Rs 583.69 crore on May 10. Brent crude futures, the global oil benchmark, fell 0.66 per cent to $ 67.87 per barrel.