Published 20:28 IST, March 2nd 2020
Rupee takes 52 paise plunge as fresh coronavirus cases spook investors
The rupee reversed its initial gains to settle sharply down by 52 paise at 72.76 against the US dollar on Monday mirroring a crash in local equities and forex outflows as detection of two fresh cases of novel coronavirus in India unnerved investors
- Republic Business
- 3 min read
The rupee reversed its initial gains to settle sharply down by 52 paise at 72.76 against the US dollar on Monday mirroring a crash in local equities and forex outflows as detection of two fresh cases of novel coronavirus in India unnerved investors.
The rupee had started the day on a positive note and was trading with gains until a Union Health Ministry statement reporting two new cases of COVID-19 infection in the country triggered a sell-off in stock markets. The Health Ministry said two more positive cases of the novel coronavirus one in Delhi and another in Telangana have been reported. In line with weak stock markets, the rupee plunged to a day's low of 72.78 before closing at 72.76 showing a loss of 52 paise over the last close. The local unit had settled at 72.24 against the greenback on Friday.
"Rupee witnessed a highly volatile trading session, it was the only losing currency among Asia, after the government agency said the nation has found two new cases of coronavirus patients," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. Sharma further said that spot USD/INR is expected to remain under pressure amid weaker economic data and foreign fund flows. Meanwhile, the number of deaths globally in the new coronavirus outbreak passed 3,000 on Monday, as China reported 42 more deaths.
On the 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, the broader NSE Nifty fell 69 points or 0.62 per cent to end at 11,132.75.
Foreign institutional investors remained net sellers in the 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 further said that "last week, GDP number released on the domestic front was also disappointing that disturbed the overall market sentiment. In the next couple of sessions we expect the rupee (spot) to quote with a negative bias and in the 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.
The dollar index, which gauges the 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 The 10-year Indian government bond yield was at 6.35 per cent. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 72.1895 and for rupee/euro at 79.4421. The reference rate for rupee/British pound was fixed at 93.0104 and for rupee/100 Japanese yen at 66.30.
Updated 20:28 IST, March 2nd 2020
