The Indian rupee depreciated six paise against the US dollar in early trade on Monday, following a lackluster trend in Indian equity markets and a firm American currency overseas.
However, lower crude prices in the international market and fresh foreign fund inflows restrict the rupee’s fall, according to forex dealers.
The dollar index rose 0.41 percent to 106.39, while Brent crude futures declined 2.58 percent to $81.47 per barrel.
The BSE Sensex and NSE Nifty fell 12.45 points, or 0.07 percent, to 18,500.30 and 62,265.67, respectively.
Markets could be trading lower in early trades due to weak Asian cues and resurgent safe-haven demand for the US dollar amid China’s increasing COVID cases.
However, the positive takeaway is that COVID concerns are offset by the optimism of more support from the Chinese central bank.
Intra-day volatility would persist, but positive catalysts such as falling crude oil prices, the US dollar index, and a better-than-expected earnings season could keep the markets in good stead.
Foreign institutional investors were net buyers in the Indian capital markets on Friday, buying shares worth Rs3.69 billion.
