26 June 2023, Mumbai: The Indian rupee experienced a decline of 9 paise against the US dollar, closing at 82.04 (provisional) on Monday. This depreciation was attributed to geopolitical concerns and the rise in crude oil prices. Analysts also noted that volatility in equity markets and Foreign Institutional Investor (FII) outflows further weighed on market sentiment.
Initially, the rupee showed signs of recovery, reaching a high of 81.94 during morning trade due to early gains in equities and a weaker US dollar in international markets. However, as stock markets became more volatile, the local currency retreated and touched a low of 82.05 in afternoon trade at the interbank foreign exchange market. The rupee ultimately closed at 82.05, marking a loss of 9 paise compared to the previous close of 81.96 against the US dollar.
Geopolitical concerns stemming from a short-lived armed rebellion in Russia were cited as a factor that eroded the appeal of riskier assets. The dollar index, which measures the strength of the US dollar against a basket of six currencies, decreased by 0.15% to 102.75. Additionally, the benchmark price of Brent crude oil increased by 0.53% to USD 74.24 per barrel.
In the domestic equity market, the 30-share BSE Sensex initially saw gains but later closed nearly flat at 62,970, with a marginal loss of 9.37 points. On the other hand, the broader Nifty index advanced by 25.70 points, closing at 18,691.20.Foreign Portfolio Investors (FPIs) were net sellers in the capital market on Friday, as they sold shares worth Rs 344.81 crore according to exchange data. This further contributed to the concerns surrounding market sentiment.
Article by PRITESH PATEL