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As on: Sep 16, 2019 06:35 PM
Rupee Weakens Amidst Heavy Selling In Local Equities
06-May-19   11:00 Hrs IST
The Indian rupee dropped lower against the dollar in early trades on Monday, 06 May 2019 on increased demand for the US currency from importers and weak opening in domestic equities. The US President Donald Trump on Sunday threatened to raise tariffs on USD 200 billion worth of Chinese goods and this in turn impacted investor sentiment in the currency market. Besides, strength in dollar against major rival currencies, foreign fund outflows and heavy selling in domestic equities also kept pressure on the Indian rupee. Foreign institutional investors (FIIs) pulled out Rs 400.68 crore on a net basis Friday, provisional data showed.

The domestic currency depreciated by 24 paise to 69.46 against the US dollar in early trades, after opening the day at Rs 69.38. The local currency however pared the initial loss and climbed to a high of 69.32 so far during the day. In the spot currency market, the Indian unit was last seen trading at 69.39. The rupee had strengthened by 15 paise to close at 69.22 against the US dollar Friday.

Domestic stocks traded with weakness in morning trade after an initial slump. At 10:16 IST, the barometer index, the S&P BSE Sensex, was down 326.14 points or 0.84% at 38,637.12. The Nifty 50 index was down 96.15 points or 0.82% at 11,616.10 Domestic stocks opened on a weak note on negative Asian stocks. Overseas, Asian stocks were trading sharply lower as trade negotiations between China and the United States deteriorated suddenly. However, easing crude prices helped in restricting the slide in the Indian unit to some extent.

Meanwhile, the dollar index was a fraction firmer at 97.548. The US dollar had already softened on Friday when jobs data beat expectations but a soft reading for wages meant the Federal Reserve could afford to stay patient on policy. The safe-haven yen climbed and the yuan slid on Monday after U.S. President Donald Trump threatened to increase tariffs on China, sending riskier assets into a spin and slamming stock futures. Trump on Sunday increased pressure on China to reach a trade deal by announcing he will hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

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