Indian rupee continued its losing streak and ended 24 paise down at 66.92 against US dollar on Monday on increased demand of the American currency among importers and bankers. Domestic equity markets weak opening also contributed to rupee’s fall. The local currency had closed 26 paise down at 66.68 level per dollar. Sensex tumbled 443.71 points to end at 28,353.54 while NSE Nifty slumped 151.10 points to 8,715.60 following their global counterparts that fell after hopes of US Federal Reserve lifting interest rates as early as next week rose again. Investors are also cautious ahead of macroeconomic data, IIP for July and inflation data for August, which are scheduled to be released later in the day. Further, foreign fund outflows and dollar’s gains against other currencies overseas, also weighed on the rupee.
Anindya Banerjee, currency analyst, Kotak Securities, said, “A broad based risk liquidation around the globe in equities an interest rates triggered the sell-off in Rupee. Technically, the pair is most vulnerable to a short squeeze in case it gets above 66:30 levels on spot, which is still some distance away. Over the near term, we expect a range of 66:60-67:20 on spot.”
The FIIs as per Monday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL. In equity segment, the gross buying was of Rs 4040.24 crore against gross selling of Rs 4377.39 crore. Thus, FIIs stood as net sellers of Rs 337.15 crore in equities. In the debt segment, the gross purchase was of Rs 2120.15 crore with gross sales of Rs 1690.46 crore. Thus, FIIs stood as net buyers of Rs 429.69 crore in debt.
The rupee depreciated by 28 paise to 66.96 against the dollar (intra-day) at the forex market also hit the sentiment. The currency touched a high and low of 66.96 and 66.85 respectively.
However, dollar was weak against other emerging market currencies like Yen, but that couldn’t help rupee gain. On the global front, the dollar began the week on the back foot on Monday as a bout of risk aversion underpinned the yen, though losses were limited as the US currency garnered some support on renewed talk of a possible rate hike by the Federal Reserve as early as this month.