Mumbai, Oct 22 (PTI) The rupee slumped 43 paise to close at 94.81 against the US dollar on Thursday, weighed down by a negative trend in the domestic equity markets and surging crude oil prices.
According to forex analysts, the rupee began trading on a flat-to-lower trajectory due to sluggish domestic equities and surging crude oil prices.
Escalation of attacks by Yemeni Houthis on Saudi Arabia’s energy infrastructure deteriorated global market sentiment, they said, adding that softening of the dollar index and a decline in US Treasury yields cushioned the downside.
At the interbank foreign exchange market, the rupee opened at 94.47 against the dollar, then lost ground to touch an intra-day low of 94.94 and finally settled for the day at 94.81, registering a decline of 43 paise over its previous close.
On Wednesday, the rupee surged 53 paise to close at 94.38 against the dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.17 per cent at 101.60.
Forex traders said near-term dollar liquidity has improved following the Jio IPO, with potential structural inflows supported by hopes of a US trade agreement.
However, this stability remains vulnerable to renewed foreign portfolio outflows or a spike in crude oil prices near USD 120 per barrel.
Brent crude, the global oil benchmark, was trading higher by 3.23 per cent at USD 112.33 per barrel in futures trade.
“Brent crude surged 3 per cent following attacks on Saudi Aramco’s oilfield as well as media reports suggesting escalation in the West Asia conflict post the US mid-term election,” said Sunny Aggrawal, Head – Fundamental Research at SBI Securities.
On the domestic equity market front, Sensex fell 460.30 points to settle at 73,249.39, while the Nifty dropped 123.70 points to 22,687.65.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,458.70 crore on a net basis on Thursday, according to exchange data.
Meanwhile, the retail portion of Jio Platforms’ initial public offering was fully subscribed, within two hours into the second day of bidding on Thursday.
Qualified Institutional Buyers led the demand at 9.42 times, followed by non-institutional investors at 2.34 times. The shareholders’ portion was subscribed 2.06 times, while the employees’ quota saw 1.61 times subscription.
Overall, the issue was subscribed 3.47 times at 11:00 am on the second day, according to exchange data. PTI DRR HVA
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