The rupee recovered from its all-time low, strengthening by 20 paise to 71.38 against the US dollar in opening trade on Wednesday on fresh foreign capital inflows. On Tuesday, foreign institutional investors invested in equities worth Rs 32.64 crore, provisional data on the domestic stock exchanges showed. Battered by a strong US dollar, coupled with higher crude prices and emerging market currencies woes, the rupee had plunged to a new historic low level on Tuesday, plunging 36 paise to 71.5737 against the US dollar.
While continuing its free fall for the second day this week, the rupee closed above the 71.50-mark on Tuesday for the first time ever. Although the rupee reversed some losses in early trade on Wednesday, the dollar’s strength against some currencies overseas amid lingering threat of a major escalation in the trade conflict between the US and China continued to keep the rupee under pressure.
“For the month of Sept, FIIs (Foreign institutional investors) sold worth Rs 1464 cr in the cash markets and were sellers to the tune of Rs 1071 cr in the debt markets. In the domestic front, Nikkei services PMI is scheduled to be released today while inflation numbers are due next week,” Geojit Financial Services said in a report. “As the currency remains oversold, some respite may be seen in the 69.72 level while on the lower end more weakness will persist if the currency remains below 71.50.”