The rupee declined 12 paise lower against the US dollar on Wednesday, March 24, to settle at 72.55, following other Asian peers amid concerns over rising COVID-19 cases. Also, the local unit witnessed a decline as investor sentiment was weighed due to massive selloff in domestic equity markets today and a spike in global crude oil rates. At the interbank foreign exchange market, the local unit opened lean at 72.51 against the dollar, having swung between an intra day high of 72.51 and an intra day low of 72.69 during the session.
In an early trade session, the rupee depreciated 10 paise to 72.53 against the greenback, due to heavy selloff in domestic equities. The local unit registered a fall of 12 paise over its previous close, settling at 72.55 against the American currency. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.13 per cent to 92.46.
“The coronavirus fears are resurfacing as cases have started to tick up all over the world. This is dampening the reopening and recovery optimism and will keep the safe-haven dollar demand intact. However, there is IPO euphoria in the market which is keeping the spot below 73 levels. Until the spot is trading below 73 zone, the trend will be bearish, with crucial support being 72.25,” said Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.
On the domestic equity market front, the 30-share BSE benchmark Sensex fell 871.13 points to end at 49,180.31, and the broader NSE Nifty declined 265.35 points to 14,549.40.
“Today was a bad day for the market. The breadth of the market was extremely poor. About two-third of the listed stocks were down as well as all sectoral indices closed in negative territory. The Nifty / Sensex closed lower at 14549/49180. Tomorrow ahead of the March 2021 F&O expiry the market is likely to be in turmoil phase and the Nifty / Sensex may fall to 14350/48580 to 14250/48300 levels,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
According to exchange data, the foreign institutional investors were net sellers in the capital market on Wednesday as they sold shares worth Rs 1,951.90 crore. Global oil benchmark brent crude climbed 3.08 per cent to $ 62.66 per barrel.