Mumbai: The Indian rupee on Tuesday weakened to over four-and-a-half month low against the US dollar in the opening trade, after foreign institutional investors (FIIs) continued to sell in the local equity markets tracking the fall in global markets. This was the third consecutive session when the rupee is trading lower.
Global markets are falling driven by the speculation that US president-elect Donald Trump’s spending plans will boost inflation and the size of the US debt while leading the Fed to pick up its pace of interest-rate increases.
Since 9 November to 11 November, FIIs sold over Rs.4,320 crore provisionally in equities while Sensex fell over 3% in this period.
The home currency opened at 67.58 against the US dollar and touched a low of 67.67—a level last seen on 30 June. At 9.15am, the rupee was trading at 67.66 a dollar, down 0.62% from its previous close of 67.25. So far this year, it fell 2.2%.
India’s benchmark Sensex index was trading at 26,809.61 points, down 0.03% or 9.21 points from its previous close. So far this year, it has gained 2.6%.
The government will issue Wholesale Price Inflation (WPI) and Consumer Price Inflation (CPI) data for October on Tuesday.
According to Bloomberg estimates, WPI will be at 3.69% in October against 3.57% a month ago. CPI will be at 4.12% against 4.31% a month ago.
The benchmark 10-year government bond yield was trading at 6.688%, compared to Friday’s close of 6.726%. Bond yields and prices move in opposite directions.
FIIs have sold $277.80 million in debt and bought $6.42 billion in equity till date this year.
Meanwhile, Asian currencies have strengthened—led by yen and won—as a dollar and Treasury yield rally spurred by Trump’s US presidential election win stalls.
Taiwan dollar was up 0.29%, Thai Baht 0.28%, Japanese yen 0.23%, Philippines peso 0.17%, South Korean won 0.15%, Indonesian rupiah 0.1%, Singapore dollar 0.09%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 99.877, down 0.23% from its previous close of 100.11.