Rupee hits 15-month low; crosses 67/$

Oil prices hit $75 a barrel while Indian indices rise, with support from bank, metal and media stocks

New Indian Currency with Dollar Symbol - 3D Rendered Image

The rupee breached the psychological barrier of ₹67 against the dollar amid strong demand for the U.S. currency from importers, as crude oil rose to $75 a barrel.

The rupee depreciated 27 paise on Monday to close the day at 67.14 to a dollar as compared with 66.87 in the previous session. This is the lowest level for the rupee since February 8, 2017 when it had ended at 67.19 against the dollar.

₹, the worst performer

The rupee has been the worst Asian currency performer this year so far against the dollar, losing 5.1% since January.

Oil jumped to its highest levels since late-2014 on Monday to cross the significant $75 a barrel tag, boosted by Venezuela’s deepening economic crisis and a looming decision on whether the United States would reimpose sanctions on Iran.

Brent crude, an international benchmark, was trading at $75.57 per barrel in early Asian trade.

Currency dealers said there was ‘huge’ dollar demand from oil importing firms which weighed on the domestic currency. India is a large importer of crude oil; so, if oil prices go further up, it could worsen the fiscal deficit. Foreign institutional investors sold ₹630 crore in equity on Monday.

The yield on the 10-year benchmark government bond eased almost 11 basis points to close at 7.62%, after the Reserve Bank of India announced open market operations for next week.

The equity markets, however, climbed, led by gains in select stocks from the banking and metal sector; the benchmark Sensex gained 292.76 points or 0.84% on Monday to close at 35,208.14. The 30-share pack saw 23 stocks gaining ground as against seven declines.

Stocks such as Axis Bank, Tata Steel, ICICI Bank, State Bank of India, Reliance Industries and ONGC were among the top gainers in the Sensex. The overall market breadth was also slightly positive with more than 1,400 stocks gaining ground as against 1,272 declines.

The broader Nifty of the National Stock Exchange settled the day at 10,715.50, rising 97.25 points or 0.92%.

The surge in the morning session was triggered by the ‘surprise’ announcement regarding open market operations by the Reserve Bank and later on, the rally was led by public sector banks, metals and media sectors with six sectors gaining more than 1% each, said V.K. Sharma, head (private client group & capital market strategy), HDFC Securities.

(With PTI inputs)