Finance
Tuesday saw an 11-paise decline in the value of the rupee relative to the US dollar, with the rupee falling to 83.32 (provisional) on the back of weak domestic equity markets and importers’ dollar demand. Forex dealers claimed that importers’ dollar demand and withdrawals of foreign funds affected market mood. The local unit depreciated 11 paise from its previous close to close at 83.32 (provisional) versus the dollar at the interbank foreign exchange market, where it had opened at 83.28.
In the first trading day of 2024 on Monday, the rupee fell 5 paise to 83.21 versus the US dollar. The dollar index, which measures the strength of the US dollar relative to a basket of six other currencies, increased by 0.11 percent to 101.44 on Tuesday. The benchmark for global oil prices, Brent crude futures, was trading higher by 2.13 per cent to USD 78.68 per barrel.On the domestic equity market front, Sensex declined 379.46 points, or 0.53 per cent, to settle at 71,892.48 points.
The Nifty fell 76.10 points, or 0.35 per cent, to 21,665.80 points. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 855.80 crore, according to exchange data.The Indian rupee depreciated by 0.14 per cent on weak domestic markets and a positive US dollar. Surge in crude oil prices also weighed on rupee. US dollar rose on safe haven appeal amid geopolitical tensions in the Red Sea and the ongoing conflict in the Middle East, according to Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.
“We expect the rupee to trade with a negative bias on weak domestic equities and a rise in the US dollar. Surge in crude oil prices may also weigh on the domestic currency. However, any FII outflows may support rupee at lower levels,” Choudhary added.Choudhary further noted that traders may take cues from final manufacturing PMI and construction spending data from the US. “Traders may await manufacturing index data from India and ISM manufacturing PMI and JOLTS jobs data from the US tomorrow. USD-INR spot price is expected to trade in a range of 83.10 to 83.70,” he added.
Regarding the macroeconomic front at home, GST receipts increased by 10% to approximately Rs 1.64 lakh crore in December of last year from Rs 1.49 lakh crore in the same month previous year. The finance ministry said in a statement on Monday that gross goods and services tax (GST) collection from April to December 2023 increased by a strong 12 percent, to Rs 14.97 lakh crore, as opposed to Rs 13.40 lakh crore collected over the same time the previous year.
Source:FE
