The rupee fell by 65 paise to close at 82.73 (provisional) against the U.S. currency on Monday, weighed down by gains in the greenback in the overtseas markets and a muted trend in domestic equities.
Sustained foreign fund outflows and firm crude oil prices further dented investor sentiments, forex traders said.
At the interbank foreign exchange market, the rupee opened at 82.35 against the greenback, and fell to an intra-day low of 82.76. It finally settled at 82.73 (provisional), down 65 paise over its previous close.
In the previous session on Friday, the rupee settled at 82.08 against the U.S. dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.24% higher at 103.16, on robust economic data from the U.S., which raised expectations of a hawkish Federal Reserve.
Global oil benchmark Brent crude futures advanced 0.45% to $80.30 per barrel.
The Indian rupee depreciated on a rally in the U.S. Dollar and weak domestic markets, said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.
"Dollar gained on robust economic data from the U.S. raising expectations of hawkish Federal Reserve.
"Non-farm payrolls added 517,000 jobs in January topping estimates of 193,000 jobs while ISM services PMI unexpectedly surged to 55.2 in January sharply above estimates of 50.5. Unemployment rate declined to 3.4% in January compared to forecast of 3.6%.
"We expect the rupee to trade with a negative bias as the rebound in Dollar may further weaken the domestic currency. Weak domestic equities and FII outflows may also put downside pressure on Rupee," Mr. Choudhary said.
However, a weak tone in crude oil prices may prevent a sharp decline in Rupee. Market participants may remain cautious ahead of RBI's monetary policy outcome on Wednesday.
"There are expectations of a 25-bps rate hike to 6.5% USDINR spot price is expected to trade in a range of ₹82 to ₹83.30," Mr. Choudhary said.
The 30-share BSE Sensex ended 334.98 points or 0.55% lower at 60,506.90, while the broader NSE Nifty declined 89.45 points or 0.5% to 17,764.60.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth ₹932.44 crore, according to exchange data.
Published - February 06, 2023 05:11 pm IST
