The rupee appreciated by 11 paise to 71.74 against the dollar in early trade on Wednesday. After starting the session at 71.76 against the greenback, the rupee climbed to as high as 71.74 in morning deals compared with its previous close of 71.85. However, it gave up some of those gains and was last seen trading at 71.78 against the US currency. Sharp losses in domestic equity markets amid continued foreign fund outflows hurt the rupee, according to analysts.
Stock market benchmark indices S&P BSE Sensex and NSE Nifty extended losses to the fourth session in a row to hit their lowest intraday levels recorded since February 3.
Crude prices edged up on Wednesday after three sessions of losses, even as fears deepened that the rapid spread of the coronavirus will lead to a global pandemic. Brent crude – the global benchmark for crude oil prices – were last seen trading 0.8 per cent higher at $55.37 a barrel.
The rupee has remained reasonably stable in the past 2-3 trading sessions compared to other emerging market peers, said Amit Pabari, managing director at forex advisory firm CR Forex Advisors.
“Volatility in the currency remains quite low as reflected on the extent of global risk-off… It is most likely that the pair will not depreciate beyond its one year high of 72.40 levels until March 2020,” he said.
Meanwhile, foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 2,315.07 crore worth of funds on Tuesday, according to provisional data from the NSE.