Rupee extends losses, trading near six month lows as selling by FIIs, DIIs affects sentiment

The rupee extended losses today on concerns over widening of trade deficit amid heightened geopolitical worries. Foreign institutional investors (FIIs) pulling out over Rs 308 crore and domestic institutional investors selling stocks worth Rs 28.97 crore in the Indian market on Monday also weakened sentiment.

The Indian currency fell to 65.53 level against the US dollar-a fresh six month low-in morning trade.

In early morning trade, the currency recovered 4 paise to 65.45 against the dollar at the interbank forex market on fresh selling of the greenback amid a higher opening of domestic equities.

A weak dollar against other currencies overseas supported the domestic unit, forex dealers said.

On Monday, the rupee closed at a six-month low of 65.49, falling 29 paise, or 0.44 per cent.

The closing was the lowest closing since October 3, 2017, when the currency had settled at 65.50 against the US dollar.

The twin shocks of country’s trade deficit hitting $13.69 billion and exports dipping after a gap of four months in March weighed on the rupee.

Meanwhile, the Sensex rose after forecast of a normal monsoon for the year.

The 30-share barometer was trading higher by 86.92 points, or 0.23 per cent, at 34,385, with power, metal, PSU, infrastructure, realty, capital goods and auto sector stocks leading the trend.

The gauge has gained 1,286.36 points in the previous eight sessions.

Similarly, the NSE Nifty rose 19.25 points, or 0.18 per cent, to 10,547.

The Indian Meteorological Department said on Monday the country would receive “normal” monsoon rainfall this year, raising hopes for higher farm output and a boost to the rain-dependent rural economy.businesstoday

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