Rupee Trims Initial Losses, Down 9 Paise Against Dollar

:The rupee opened at 66.12 a dollar and touched a high and a low of 66.09 and 66.20, respectively

The Indian rupee on Wednesday weakened against the US dollar after local equity markets fell over 300 points.

At 2.12pm, the home currency was trading at 66.19, down 0.24% from its previous close of 66.03. The local unit opened at 66.12 a dollar and touched a high and a low of 66.09 and 66.20, respectively.

At 2.20pm, the benchmark Sensex index fell 1.37%, or 355.05 points, to 25,509.42. The Sensex fell in 15 out of 20 sessions. Since 19 October till date, Sensex has fallen 6.4% or 1,750 points.

Investors are awaiting information from global policy makers. The US Federal Reserve releases minutes from its last meeting Wednesday, while the Bank of Japan began a two-day meeting, Bloomberg reported.

The yield on India’s 10-year benchmark bond was trading at 7.687% compared with its Tuesday’s close of 7.67%. Bond yields and prices move in opposite directions.

The employees of the Reserve Bank of India are set to go on a strike on Thursday for the first time in more than six years to protest against the government taking powers from the central bank, threatening to disrupt bond and foreign currency markets, which could affect settlements under the payment platform operated by the central bank, Bloomberg reported, quoting Rajeev Radhakrishnan, Mumbai-based head of fixed income at SBI Funds Management.

Foreign institutional investors (FIIs) sold equities in eight out of 10 sessions. Since 30 October to 16 November, FIIs sold $651.22 million in equities. Since 27 October to 16 November, FIIs sold $494.09 million in debt.

In fiscal year 2016 so far, FIIs have sold $2.05 billion in equity, the steepest selling since fiscal year 2009. In FY16, FIIs were the net sellers in equity in five out of eight months.

Data on Tuesday offered a mixed view of the health of the US economy—consumer prices increased 0.2% in October after two straight months of declines, while industrial production fell. The modest rise in inflation could bolster chances of the US central bank, the Federal Reserve, raising interest rates next month, but weak industrial output raised concerns about the robustness of fourth-quarter economic growth, Reuters reported.

Since the beginning of this year, the rupee has lost 4.8%, while FIIs have bought $3.95 billion from local equity and $8.51 billion from bond markets.

Most Asian currencies were trading lower. Indonesian rupiah was down 0.53%, South Korean won 0.16%, Taiwan dollar 0.1%, China renminbi, while China offshore and Thai baht were down 0.1% each. However, Japanese yen was up 0.11%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 99.498, down 0.13% from its previous close of 99.631.

Source : livemint.com