The Indian rupee opened higher by 73 paise at 69.49 per dollar on Monday morning against the previous close 70.22 after the exit polls predicted landslide victory for Modi-led Bharatiya Janata Party (BJP) in Lok Sabha elections 2019. The final results will be announced on May 23. The experts said market gains would be kept in check ahead of the vote counting this week on Thursday. The global tensions and foreign investment flows will also drive the rupee besides major event of elections.
“Based on the exit poll results which turned out to be favourable for the ruling Bharat Janata Party, the dollar,rupee pair will see a resistance around 69.80 on a higher side and the dollar could slip towards 69.30 against the rupee,” Amit Sajeja, Associate Vice President, Motilal Oswal, told Financial Express Online.
The Indian rupee was under pressure for some time due to escalating trade tensions between the world’s two largest economies US and China and also because of the foreign investment outflows on the back of uncertainties due to another government coming to power at the centre.
After the world’s largest economy US imposed tariffs on Chinese goods of $200 billion, China also hit back at the US and said it would levy tariffs on range of US goods of $60 from June 1. Yesterday, it also threatened the US for banning the products of Chinese technology giant Huawei in US networks.
Foreign institutional investors (FIIs) offloaded shares worth Rs 1,058 crore on a net basis, while domestic institutional investors (DIIs) bought shares worth Rs 1,810 crore on Friday, according to NSE data. The foreign investors have pulled out Rs 6,399 crore from the Indian markets in May on a net basis on account of uncertainties related to Lok Sbaha election results and the escalating US-China trade worries.