The Indian rupee depreciated 16 paise and slipped below the psychologically important 96-per-dollar mark in early trade on Tuesday, weighed down by elevated crude oil prices and persistent foreign fund outflows.
At the interbank foreign exchange market, the rupee opened at 96.03 and fell to 96.13 against the US dollar, a fall of 16 paise from its previous close of 95.97 on Monday.
Why the rupee is under pressure
Forex traders said the currency is under pressure from the combination of firm oil prices and rising US nominal and real yields, which are drawing portfolio flows out of emerging markets, including India. One trader noted the rupee could touch 96.50 in the coming days, with a clear break above that level opening the door towards 98. Major support is now at 95.50.
The dollar index, which measures the greenback against a basket of six currencies, traded at 101.23, up 0.04 per cent. Brent crude, the global oil benchmark, was trading 1.51 per cent higher at $106.87 a barrel in futures trade amid concerns over disruptions to crude supplies through the Strait of Hormuz.
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, pointed to a silver lining: "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."
Equities start weak too
The pressure extended to domestic equities. In early trade, the Sensex tanked 503 points to 72,260.09, while the Nifty dropped 151 points to 22,626.50. Foreign Institutional Investors offloaded equities worth Rs 5,353.22 crore on a net basis on Monday, according to exchange data, extending the outflow trend that has kept both markets and the currency on edge.
Sources:
ETV Bharat (PTI): Rupee Falls 16 Paise To 96.13 Against US Dollar In Early Trade
Times Now: Stock Market Today (September 29): Sensex, Nifty Fall; Oil, US-Iran Indirect Talks In Focus
At the interbank foreign exchange market, the rupee opened at 96.03 and fell to 96.13 against the US dollar, a fall of 16 paise from its previous close of 95.97 on Monday.
Why the rupee is under pressure
Forex traders said the currency is under pressure from the combination of firm oil prices and rising US nominal and real yields, which are drawing portfolio flows out of emerging markets, including India. One trader noted the rupee could touch 96.50 in the coming days, with a clear break above that level opening the door towards 98. Major support is now at 95.50.
The dollar index, which measures the greenback against a basket of six currencies, traded at 101.23, up 0.04 per cent. Brent crude, the global oil benchmark, was trading 1.51 per cent higher at $106.87 a barrel in futures trade amid concerns over disruptions to crude supplies through the Strait of Hormuz.
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, pointed to a silver lining: "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."
Equities start weak too
The pressure extended to domestic equities. In early trade, the Sensex tanked 503 points to 72,260.09, while the Nifty dropped 151 points to 22,626.50. Foreign Institutional Investors offloaded equities worth Rs 5,353.22 crore on a net basis on Monday, according to exchange data, extending the outflow trend that has kept both markets and the currency on edge.
Sources:
ETV Bharat (PTI): Rupee Falls 16 Paise To 96.13 Against US Dollar In Early Trade
Times Now: Stock Market Today (September 29): Sensex, Nifty Fall; Oil, US-Iran Indirect Talks In Focus