Rupee takes 52 paise plunge as fresh coronavirus cases spook investors

rupee reversed its initial gains to settle sharply down by 52 paise at 72.76 against US dollar on Monday mirroring a crash in local equities and forex outflows as detection of two fresh cases of vel coronavirus in India unnerved investors.

rupee had started day on a positive te and was trading with gains until a Union Health Ministry statement reporting two new cases of COVID-19 infection in country triggered a sell-off in stock markets. Health Ministry said two more positive cases of vel coronavirus one in Delhi and ar in Telangana have been reported. In line with weak stock markets, rupee plunged to a day's low of 72.78 before closing at 72.76 showing a loss of 52 paise over last close. local unit had settled at 72.24 against greenback on Friday.

READ: Mumbai: BMC Set To Ban Single-use Plastic From May 1

"Rupee witnessed a highly volatile trading session, it was only losing currency among Asia, after government ncy said nation has found two new cases of coronavirus patients," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. Sharma furr said that spot USD/INR is expected to remain under pressure amid weaker ecomic data and foreign fund flows. Meanwhile, number of deaths globally in new coronavirus outbreak passed 3,000 on Monday, as China reported 42 more deaths.

On equity front, equity benchmark index Sensex closed 153.27 points lower at 38,144.02 on Monday as detection of fresh coronavirus cases in India spooked domestic investors. While, broader NSE Nifty fell 69 points or 0.62 per cent to end at 11,132.75.

Foreign institutional investors remained net sellers in Indian capital markets, offloading equities worth a net Rs 1,354.72 crore on Monday, according to provisional exchange data. "Rupee continued to remain under pressure as domestic equities were weighed down after a couple of coronavirus cases were reported in India," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiyaa furr said that "last week, GDP number released on domestic front was also disappointing that disturbed overall market sentiment. In next couple of sessions we expect rupee (spot) to quote with a negative bias and in range of 72.50 and 73.20." Meanwhile, global crude oil benchmark, Brent futures, rose 1.15 per cent to trade at USD 50.24 per barrel.

dollar index, which gauges greenback's strength against a basket of six currencies, slipped 0.38 per cent to 97.75. "Rupee continued its weakness on back of corona virus hitting 10-year Indian government bond yield was at 6.35 per cent. Financial Benchmark India Private Ltd (FBIL) set reference rate for rupee/dollar at 72.1895 and for rupee/euro at 79.4421. reference rate for rupee/British pound was fixed at 93.0104 and for rupee/100 Japanese yen at 66.30.

READ: Rupee Rises 20 Paise To 74.04 Against US Dollar In Early Trade