The Indian rupee on Monday weakened 0.7%, its steepest fall in nine weeks, against the US dollar, tracking losses in the local equity and Asian currencies.
At 2.20pm, the rupee was trading at 66.57 a dollar, down 0.66% from its previous close of 66.14. The local currency opened at 66.27 dollar and touched a low of 66.58, a level last seen on 17 December.
India’s benchmark equity index, BSE Sensex, was trading at 25,607.52 points, down 2.12% or 553.38 points.
Most Asian currencies fell after Chinese factory data disappointed investors, while tension in the Middle-east sent crude oil higher. South Korean won was down 1.3%, Malaysian ringgit 1.02%, Singapore dollar 0.72%, China offshore spot 0.71%, Taiwan dollar 0.68%, Indonesian rupiah 0.65%, Philippines peso 0.4%, China renminbi 0.39% and Thai baht 0.26%.
Data showing that manufacturing activity worsened in both China and India dragged the rupee down.
Indian manufacturing activity contracted in December for the first time in more than two years, hurt by softening domestic demand, adding pressure on the central bank to ease policy, a business survey showed on Monday. Nikkei’s Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, fell to a 28-month low of 49.1 in December from November’s 50.3.
The Caixin China Manufacturing PMI index decreased to 48.2 last month, below economist estimates for 48.9. That followed official figures released Friday which showed the PMI edging up to 49.7, also below estimates for 49.8. Numbers below 50 indicate deterioration.
Since 1 April till date, foreign institutional investors have sold $2.73 billion from local equity markets and bought $657.65 million from debt markets.
Meanwhile, the yield on India’s 10-year benchmark bond stood at 7.773% compared to 7.73% from its previous close. Bond yields and prices move in opposite directions.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.087, down 0.6% from its previous close of 98.683.
Source:- livemint.com
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