The Indian rupee tumbled by 24 paise to settle at 71.56 (provisional) against the US dollar on Tuesday as concerns over the economic fallout from coronavirus outbreak continued to roil forex market sentiment.
The 30-share BSE index was trading 161.85 points or 0.39 per cent higher at 41,325.61, and the broader NSE Nifty rose 57.70 points or 0.48 per cent to 12,184.25. SBI was the top gainer in the Sensex pack, rising up to 2.14 per cent, followed by PowerGrid, Axis Bank, Bharti Airtel, Reliance Industries (RIL), Maruti and HDFC twins.
The rupee pared most of its initial losses and settled the day marginally down by 5 paise as China offering to buy additional US goods to ease trade tensions bolstered hopes of a partial deal between the two major economies.
A man approached the police on Monday claiming the foreigner has duped him of Rs 10 lakh using the same "magic trick". Alain would use his "magic trick" on notes and tell gullible people to check the money after two hours and find it converted into American dollars, the officer said.
In a major relief to foreign portfolio investors, FM Nirmala Sitharaman said Super-rich tax will not apply on capital gains arising from sale of any security including derivatives in hands of FPIs.
Forex trader said the local unit came under pressure after the latest escalation of the US-China trade war.
However, weakening of the American currency in the overseas market, and easing crude oil prices restricted the rupee's decline, forex traders. The rupee came under pressure following heavy selling in domestic equities amid outflow of foreign funds, they added.
The acceptance of Indian currency is good news for tourists from that country as earlier they lost a sizeable amount due to exchange rates.
The rupee opened weak at 69.41 at the interbank forex market and then fell further to 69.45, down 19 paise over its last close. The rupee had settled at 69.26 against the US dollar Tuesday.
The domestic currency in the four sessions to Thursday has appreciated by 80 paise or 0.8 per cent on hopes of forex inflows.
Forex traders said strengthening of the US dollar against some currencies overseas, focus on interim budget and rising crude oil prices weighed on the local unit.
“Knee jerk gains in bonds are likely, before returning to familiar drivers particularly in midst of the sharp overnight sell-off in the US markets,” said the DBS Banking Group in its report on Tuesday.
The rise in the rupee was also supported by dollar-selling by exporters and banks and the US unit's weakness against some currencies overseas, traders said.
On Thursday, the local currency had depreciated by 11 paise to close at 73.27 against the US dollar due to steady capital outflows and sharp decline in domestic equities amid intensifying geopolitical tensions.
Besides, dollar-selling by exporters and banks, the dollar's weakness against some currencies overseas, helped the recovery in the domestic currency.
The domestic currency dropped 43 paise to 73.34 against the US dollar in the early trade at the Interbank Foreign Exchange market.
The domestic currency has been under pressure in recent past with deluge of headlines covering from a range of fundamental concerns against the grim backdrop of surging global crude prices and sustained capital outflows.
Strong month-end demand for the US currency mainly from oil importers along with currency futures expiry related purchases predominantly weighed heavily on the forex market and haunted investor sentiment.
The Indian currency crashed on Tuesday on concerns over Turkey's economic woes that have impacted various emerging markets, even as the US dollar gained strength against other currencies.
According to industry experts, the rupee value vis-a-vis USD went into decline as the US dollar gained rapid strength amid fears that economic crisis in Turkey could spread to other global economies.
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