Third Straight Session Decline; Rupee Settles Seven Paise Lower At 72.62 Against Dollar Amid New COVID-19 Cases

Registering losses for the third straight session, the rupee slipped seven paise lower against the US dollar on Thursday, March 25, to settle at 72.62 amid volatile trading in domestic equities due to concerns over rising COVID-19 cases in the country and other parts of the world. At the interbank foreign exchange market, the local unit opened lower to 72.68 against the dollar but recovered some of its losses during the trading session. In an early trade session, the domestic unit edged lower by nine paise to 72.64 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.14 per cent to 92.66. According to analysts, markets will stay volatile for the next few days due to uncertainty over the second wave of coronavirus cases in the country and the third wave in some parts of Europe.

”It’s a global risk-off sentiment prevailing particularly in Emerging Markets and that has kept the dollar-rupee higher despite the flows. 72.50 a good support which can be bought while 72.80 should be a good sell for the day. Overall weak sentiments prevail keeping rupee lower for the moment,” said Anil Kumar Bhansali, Head- Treasury, Finrex Treasury Advisors. 

On the domestic equity market front, the BSE Sensex crashed 740 points or 1.51 per cent to close at 48,440.12, while the broader NSE Nifty declined 224.50 points or 1.54 per cent to 14,324.90.

”Benchmark equity indices suffered sharp swings on either side on March 25 as the March series F&O expiry had a volatile close. A second sharp selloff post-14:45 Hrs meant that the Indices closed almost at the intra day lows. At close the Nifty 50 too fell 1.5 per cent or 224.5 points to end at 14,324.90,” said Deepak Jasani, Head of Retail Research, HDFC Securities. ”A sharp rise in COVID-19 cases globally and reports of lockdown seems to have eroded investors’ risk appetite,” he added. 

According to exchange data., the foreign institutional investors were net sellers in the capital market on March 24 as they sold shares worth Rs 1,951.90 crore. Global oil benchmark, brent crude futures fell 1.40 per cent to $ 63.32 per barrel.