Rupee falls amid frenetic sell-off in stocks
THE RUPEE depreciated by 44 paise on Thursday to close at 70.90 vis-à-vis the US dollar on a day when the BSE benchmark Sensex crashed by over 572 points.
The dollar and yen rose on safe-haven buying after the arrest of a top executive of Chinese telecom giant Huawei in Canada for suspected violation of US sanctions against Iran.
Forex traders said increasing demand for the greenback weighed on the rupee, which slipped below the 71 mark during the day.
After opening lower at 70.82, the rupee plunged to the day's low of 71.14 and finally settled at 70.90.
On Wednesday, the rupee had gained 3 paise to touch 70.46 against the US dollar.
Market participants remain concerned about election outcomes with state elections results due next week. These events were enough for investors to take money off the table and we witnessed a flight to quality as the INR weakened versus the dollar, said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
Benchmark equity indices cracked for the third consecutive session Thursday on negative global cues. The BSE Sensex plunged 572.28 points, or 1.59 per cent, to close at 35,312.13. Similarly, the broader NSE Nifty fell 181.75 points, or 1.69 per cent, to 10,601.15.
Foreign portfolio investors (FPIs) net bought shares worth Rs 72.47 crore Thursday, while domestic institutional investors (DIIs) offloaded equities to the tune of Rs 389.78 crore, provisional data showed. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.0371 and for rupee/euro at 80.5457. The reference rate for rupee/British pound was fixed at 90.2953.