Key Points:
- India rupee decline hits record low of 90.56 vs USD amid India-US trade uncertainty and foreign fund outflows.
- Strong dollar and rising crude prices add pressure on the rupee.
- Indian equities rise despite currency weakness, led by metals and industrials.
India’s rupee fell 24 paise to a record low of 90.56 against the US dollar in early Friday trade, reflecting the ongoing India rupee decline amid uncertainty over India-US trade talks and continued foreign fund outflows.
Rupee Sets Fresh Low Amid Trade Negotiation Concerns
The rupee opened at 90.43 at the interbank foreign exchange before slipping further to 90.56 against the dollar, extending Thursday’s plunge when it closed at an all-time low of 90.32. Forex dealers said the currency remains under pressure as importers increase dollar purchases amid rising global prices for precious metals.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said traders are watching the final day of talks with a visiting US delegation. “The range of 90 to 90.60 should be honoured with a close watch on the RBI. We hope a deal is announced after the talks conclude,” Bhansali told PTI.
Foreign institutional investors sold shares worth ₹2,020.94 crore on Thursday, while domestic investors purchased ₹3,796.07 crore on a net basis, partially offsetting the outflows. Analysts said persistent overseas withdrawals have contributed to the India rupee decline.
Dollar Strength and Crude Gains Add Pressure
The dollar index, which measures the greenback against six major currencies, inched up 0.02% to 98.37 in morning trade, adding to the rupee’s weakness. Dealers noted that even minor gains in the dollar index amplify pressure on emerging-market currencies during periods of uncertainty.
Brent crude futures rose 0.67% to USD 61.69 per barrel. Higher crude prices typically weigh on India’s trade deficit, increasing demand for dollars from energy importers. “The combination of a stronger dollar and firmer crude is not helping sentiment,” said a Mumbai-based currency strategist, who requested anonymity due to company policy. “Until there is clarity on trade talks, volatility is likely to persist.”
Equity Markets Open Higher Despite Currency Weakness
Indian equities opened higher for the second straight session, buoyed by gains in metal stocks and positive cues from Asian markets. At 9:40 a.m., the S&P BSE Sensex rose 437.32 points, or 0.52%, to 85,225.45. The NSE Nifty50 gained 129.30 points, or 0.50%, to 26,027.85.
Most sectoral indices traded in the green, with Nifty Metal climbing 1.22% and Nifty Realty adding 0.66%. Nifty Oil & Gas and Nifty Media rose 0.63% each. Nifty IT was the lone laggard, dipping 0.12% as the weakening rupee raised margin concerns.
Larsen & Toubro led the gainers, advancing 2.24%, followed by Hindalco Industries at 2.14% and Tata Steel at 1.73%. Adani Ports and Bharat Electronics posted gains of more than 1%. On the downside, Wipro and Max Healthcare slipped 0.54% each, while Eicher Motors, Hindustan Unilever and Bajaj Auto registered modest declines.
Analysts said equity sentiment remains supported by strong domestic participation even as global investors remain cautious. “The market is showing resilience, but currency volatility is a concern,” said a senior broker in Mumbai. The persistent India rupee decline continues to attract attention from traders and investors, highlighting ongoing concerns about currency volatility.
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