Rupee breaks 31 paise down at 74.86 against US dollar

The rupee on Tuesday fell 31 paise to 74.86 (provisional) against the US currency, as risky assets declined amid deepening geopolitical tensions.

Forex traders said continued outflow of foreign funds, a weak trend in domestic equities and a rise in crude oil prices weighed on investor sentiment.

At the interbank foreign exchange, the rupee opened at 74.71 against the US dollar but later settled as low as 74.99 against the greenback.

The local unit closed at 74.86, down 31 paise from the previous close.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04% lower at 96.03.

Sugandha Sachdeva, Vice President, Commodity and Currency Research, Religare Broking Ltd. said, “The rupee has depreciated by about 0.50% amid rising tensions between Russia and Ukraine, hurting risk sentiments in the markets and causing significant outflows. “

Besides, supply concerns have pushed crude oil prices to a seven-year high, dragging the Indian rupee down, Ms. Sachdeva said.

Global oil benchmark Brent crude futures jumped 3.56% to $98.79 a barrel.

“So far, the dollar has remained decent, largely because of its safe-haven appeal in the backdrop of geopolitical risks. This will keep the Indian rupee under pressure in the near term. We envisage near-term support. 75 points for the domestic unit, violation of which will result in further depreciation of the rupee-dollar exchange rate,” said Ms. Sachdeva.

On the domestic equity market front, the 30-share Sensex closed 382.91 points or 0.66% lower at 57,300.68, while the broader NSE Nifty closed 114.45 points or 0.67% lower at 17,092.20.

Foreign institutional investors remained net sellers in the capital markets on Monday as they sold shares worth Rs 2,261.90 crore, according to stock exchange data.