The Indian rupee recovered marginally against the dollar in early trades on Wednesday, 30 May 2018 as strength in the dollar against other currencies overseas weighed on the domestic unit. Sustained foreign fund outflows, increased demand for the US currency from importers and banks amid a lower opening in the domestic equity market too dampened rupee sentiment to some extent.
The domestic currency opened at Rs 67.8475 against the dollar and dropped to a low of 67.9100 before bouncing back to a high of 67.7075 so far during the day. In the spot currency market, the Indian unit was last seen trading at 67.73, off intra-day lows. Yesterday, the rupee fell 43 paise to end at 67.86 due to heavy month-end dollar demand from importers.
Stocks cut losses in morning trade after a gap-down opening triggered by weak Asian stocks. At 10:15 IST, the barometer index, the S&P BSE Sensex, was down 115.05 points or 0.33% at 34,834.19. The Nifty 50 index was down 44.15 points or 0.42% at 10,589.15. Shares from cement and telecom sectors saw mixed trend. Shares of private sector banking major ICICI Bank dropped. Domestic stocks began trading for the day on a downbeat note on weak Asian stocks.
Overseas, Asian stocks dropped as concerns about the repercussions of Italys political turmoil and the renewal of trade tensions between the US and China gripped financial markets. The prospect that Italy might need a fresh election that could effectively become a referendum on the nations inclusion in the euro zone rattled markets. US stocks tumbled yesterday, 29 May 2018 joining a global equity selloff sparked by concern Italys political woes will destabilise Europe.
Meanwhile, the dollar maintained its momentum, continuing to rally against major currencies in morning trade in Asia Wednesday even as both the Japanese yen and Korean won also gained ground. The U.S. dollar index climbed to a fresh high of 94.93 overnight. The index that tracks the greenback against a basket of six major currencies gained 0.08% to 94.91.