Indian Currency Opens Weaker Against the US Dollar
The Indian rupee weakened by 5 paise to 90.22 against the US dollar in early trade on Tuesday in Mumbai, tracking a stronger American currency, rising crude oil prices, and continued foreign fund outflows.At the interbank foreign exchange market, the rupee opened at 90.24 and moved marginally higher to 90.22 against the greenback in initial deals. This marked a decline of 5 paise from its previous close.
On Monday, the rupee had ended slightly higher at 90.17 against the US dollar.
Global Uncertainty Lifts Dollar Demand
Market participants pointed to heightened geopolitical concerns and global trade uncertainty as key factors driving demand for the US dollar. The increased global appetite for the greenback added pressure on emerging market currencies, including the rupee.The dollar index, which tracks the US currency against a basket of six major currencies, was trading 0.11 per cent higher at 98.73.
Crude Oil and Foreign Fund Outflows Weigh on Sentiment
Brent crude oil, the global benchmark, rose 0.28 per cent to USD 64.05 per barrel in futures trade, adding to concerns for the domestic currency.Foreign institutional investors continued to trim their equity exposure, selling shares worth Rs 3,638.40 crore on Monday, as per exchange data.
Domestic Equity Markets Trade Higher
Despite weakness in the rupee, domestic equity benchmarks traded in positive territory in early deals. The Sensex rose 125.96 points, or 0.15 per cent, to 84,004.13, while the Nifty gained 47.25 points, or 0.18 per cent, to 25,837.50.Buying interest in equities was supported by positive domestic macroeconomic indicators released a day earlier.
Inflation and Tax Collection Data Offer Support
Latest government data showed that retail inflation climbed to a three month high of 1.33 per cent in December, driven largely by higher food prices, though it remained within comfortable levels.In addition, net direct tax collections grew 8.82 per cent to over Rs 18.38 lakh crore so far in the current fiscal year up to January 11, supported by improved corporate tax inflows and slower refunds.
Net corporate tax collections increased 12.4 per cent to over Rs 8.63 lakh crore, while taxes from non corporates, including individuals, rose 6.39 per cent to around Rs 9.30 lakh crore.
These indicators helped cushion equity markets even as currency and global factors continued to exert pressure on the rupee in early trade.
Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.