Rupee closes flat at 73.19 as coronavirus scare keeps rate cut optimism in check

rupee swung wildly before closing flat at 73.19 against US currency on Wednesday as increasing number of coronavirus cases in India kept investors on edge despite a rate cut by US Federal Reserve.

rupee h opened strong and raced to a high of 72.90 to US dollar in early tre following weakness in US currency after rate cut by US Fed.

Investors, however, turned nervous following an increase in number of coronavirus cases in India amid emerging fears that rate cut would t be sufficient to boost markets due to supply constraints and limit rate of infection. Indian government on Wednesday said 28 positive cases of coronavirus have been detected so far in India.

rupee gave up gains as US dollar, considered as a safe bet in event of a crisis, strengned, falling to day's low of 73.64. After swinging 74 paise between day's high and low, rupee closed flat at 73.19 to dollar in line with some recovery in stock markets.

On stock market front, BSE Sensex swung over 945 points during day. 30-share index settled 214.22 points or 0.55 percent lower at 38,409.48. broer NSE Nifty closed 52.30 points or 0.46 percent down at 11,251. Foreign investors remained net sellers in capital markets, offloing securities worth Rs 878.38 crore on Wednesday. 

benchmark 10-year 6.45 government bond yield jumped 11 points to 6.22 amid volatile equity markets. Global crude oil benchmark Brent shot up 1.51 percent to tre at USD 52.38 per barrel amid buzz that oil-producing countries might consider production cut in a bid to cushion impact of coronavirus epidemic on prices.

dollar index, which gauges greenback's strength against a basket of six currencies, rose 0.20 percent to 97.35. "A heavy selling was witnessed in rupee after a positive opening. weakness crossed 73.50 marks against dollar as USD/INR pair tred above 73.50 for first time since vember 2018.

" panic of corona plays into our domestic market as well as global front which has forced funds outflows," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities. Financial Benchmark India Private Ltd (FBIL) set reference rate for rupee/dollar at 72.8733 and for rupee/euro at 81.23. reference rate for rupee/British pound was fixed at 93.14 and for rupee/100 Japanese yen at 67.62.