Increased dollar demand from importers and banks hampered the Indian rupee which slipped to a fresh two-week low in early trade on Tuesday. The rupee weakened by another 5 paise to a new two-week low of 68.93 against the US dollar in early trade. The rupee sentiment was impacted by the dollar’s gains against other currencies amidst escalating trade war worries between the United States and China. The rupee on Monday had plunged by 28 paise to end at 68.88 against the greenback.
Further fall in the rupee was capped by a positive opening of the domestic stock markets. The benchmark indices hit fresh record peaks in opening trade on Tuesday, with the Sensex opening at a new high of 37,849.21, up 157.32, or 0.42%. The broader Nifty 50 of the National Stock Exchange started at 11,423.15, up 36.05 points or 0.32%.
Share Market Live: Sensex falls 190 pts from all-time high, Nifty slips below 11,400; RIL, TCS drag
“Concerns on the trade deficit and falling FX reserves also weighted down on the home currency. On the other end, US dollar got boost from the Fed’s recent comment on the gradual increase in the interest rates and the ongoing tensions between US and China,” Geojit Financial Services said in a note.
“In the domestic space, FIIs were buyers to the tune of Rs 248.70 crore in the cash market segment while DIIs also continued its buying spree; bought shares worth Rs 218.64 crore.” The note said the 69.14 still remains the major level for the rupee while on the other side 67.80 is the level to focus above which rupee is likely to hit 67.05.