Mumbai: The selling of foreign funds unabated in the domestic market and the strength of Dollar Strongly impacted against some major currencies Rupee on Wednesday. Indian currency The intraday trade weakened to a record low of 78.39 against the dollar and closed just short of that level at 78.38, which is still 30 paise lower. On the other hand, Sensex closed 710 points lower at 51,823 due to strong selling in RIL as investors were cautious earlier. US Federal Reserve Chief’s testimony to Congress later in the evening.
Like in the past few weeks, the day’s selling lead again on Dalal Street foreign money, which continues to remain in risk-free mode, withdrawing money from emerging markets. These include stocks in India, market players said. In June so far, foreign portfolio investors (FPIs) have net selling stocks worth over Rs 44,000 crore – the biggest monthly figure since March 2020, CDSL data showed.
Wednesday’s sell-off also left investors with a market capitalization of Rs 240.4 lakh crore on BSE, falling by Rs 3.4 lakh crore. According to Sugandha Sachdeva of Religare Broking, the rupee fell to a new record low amid unabated outflow of foreign funds from domestic equities and renewed strength in the greenback.
The forward premium on the rupee, reflecting the interest rate differential between the Indian and US markets, had fallen during the day. A low forward premium is not good for the spot exchange rate as it presents an opportunity for those betting against the currency. KN Day said, “The fall in forward premium is because money market rates in the US have gone up. This is purely due to the difference between Indian and US interest rates and does not imply a fall in demand for the dollar. There has been a decline.” of United Financial Consultants.
In the offshore non-deliverable forward (NDF) market, where participants could bet on the rupee without changing hands, the rupee weakened to 78.4, indicating some FPI activity. But after the market closed in India, it strengthened till 78.25 late in the evening. “I expect the rupee to touch 77 levels in the coming weeks,” Dey said.
Stock market players can take some consolation from the US Fed chief’s statement to Congress in which he offered nothing more than what the central bank said recently. Following his statement, US markets, which opened in the deep red, made up for losses to trade with modest gains. “The short-term pull-back rally reflects the level of uncertainty in the market,” said Vinod Nair, Geojit Financial Services.
Like in the past few weeks, the day’s selling lead again on Dalal Street foreign money, which continues to remain in risk-free mode, withdrawing money from emerging markets. These include stocks in India, market players said. In June so far, foreign portfolio investors (FPIs) have net selling stocks worth over Rs 44,000 crore – the biggest monthly figure since March 2020, CDSL data showed.
Wednesday’s sell-off also left investors with a market capitalization of Rs 240.4 lakh crore on BSE, falling by Rs 3.4 lakh crore. According to Sugandha Sachdeva of Religare Broking, the rupee fell to a new record low amid unabated outflow of foreign funds from domestic equities and renewed strength in the greenback.
The forward premium on the rupee, reflecting the interest rate differential between the Indian and US markets, had fallen during the day. A low forward premium is not good for the spot exchange rate as it presents an opportunity for those betting against the currency. KN Day said, “The fall in forward premium is because money market rates in the US have gone up. This is purely due to the difference between Indian and US interest rates and does not imply a fall in demand for the dollar. There has been a decline.” of United Financial Consultants.
In the offshore non-deliverable forward (NDF) market, where participants could bet on the rupee without changing hands, the rupee weakened to 78.4, indicating some FPI activity. But after the market closed in India, it strengthened till 78.25 late in the evening. “I expect the rupee to touch 77 levels in the coming weeks,” Dey said.
Stock market players can take some consolation from the US Fed chief’s statement to Congress in which he offered nothing more than what the central bank said recently. Following his statement, US markets, which opened in the deep red, made up for losses to trade with modest gains. “The short-term pull-back rally reflects the level of uncertainty in the market,” said Vinod Nair, Geojit Financial Services.