Rupee slips 16 paise to 69.05 against dollar; Sensex, Nifty down 0.70% each
The Indian rupee opened weak at the interbank forex market on Wednesday and declined by 16 paise to 69.10 against the US dollar, amid sustained foreign fund outflows and rising crude oil prices. The rupee had settled at 68.94 against the US dollar on Tuesday. As per forex traders, the rupee is expected to trade in a narrow range ahead of the significant global cues, including European Central Bank (ECB) policy statement scheduled to be released on Thursday, US second-quarter preliminary GDP print on Friday, and the Federal Open Market Committee (FOMC) meeting on July 31.
Cautious opening in domestic equities and strengthening of the US dollar against other currencies overseas amid massive foreign fund outflow has kept the pressure on the Indian rupee. The net investment of equity and debt reported by Foreign Portfolio Investment (FPIs) remained bearish with net selling Rs 2,607.97 crore from Indian equities while Domestic Institutional Investors (DIIs) bought Rs 2,625.10 crore Tuesday. Domestic bourses today started day's trade on a positive note although, erased gains early due to short build-up position by market participants.
Benchmark BSE Sensex and NSE Nifty dropped over 0.70% each by the morning trading session as investor sentiment dampened further after IMF cut India's growth outlook amid massive foreign fund outflow recorded yesterday. Weak corporate earnings are also pushing the market lower, traders said. After swinging nearly 250 points in the highly volatile opening session, BSE S&P Sensex traded 240 points down at 37,740 and broader index NSE Nifty50 traded at 11,239, by 91 points of decline. In the previous session, the 30-share index ended 48.39 points lower at 37,982.74 and the broader index Nifty50 fell 15.15 points to close at 11,331.05.
The IMF in its World Economic Update on Tuesday projected a slower growth rate for India in 2019 and 2020, a downward revision of 0.3% for both the years, saying, "India's economy is set to grow at 7.0% in 2019, picking up to 7.2% in 2020. The downward revision of 0.3 percentage point for both years reflects a weaker-than-expected outlook for domestic demand". In the meanwhile, Brent crude futures, the global oil benchmark, rose 0.27% to USD 64 per barrel. Oil prices edged higher on Wednesday, extending gains as rising tensions with Iran fueled concerns about supply disruptions and as U.S. inventory data showed a much bigger than expected drop in crude stockpiles.
Elsewhere in Asia, Shanghai Composite Index, Hang Seng, Nikkei and Kospi were trading in the green in their respective early sessions. Equities on Wall Street too closed higher as US-China trade talks to begin next week. European markets like FTSE, CAC and DAX Index surged over 1% each on strong earnings.
Edited with agency inputs.
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