In early trading, the Indian rupee rises 6 paise against the US dollar

As a result of strong buying in domestic equities and a weaker US dollar, the rupee gained 6 paise to 78.27 against the US dollar in Monday’s opening trading. Forex dealers reported that the rupee’s advance was nevertheless constrained by high crude prices and ongoing foreign fund outflows.

The rupee gained 6 paise over the previous close at the interbank foreign exchange after swiftly rising to quote at 78.24 against the US dollar. The rupee had previously reached an all-time low against the US dollar in the previous session, closing at 78.33.

The 30-share Sensex was up 589.05 points, or 1.12%, at 53,317.03 on the domestic equities market, while the larger NSE Nifty was up 179.65 points, or 1.14 percent, at 15,878.90. The dollar index, which measures the strength of the dollar against a basket of six different currencies, decreased 0.14 percent to 104.03.

Brent crude futures, the global standard for crude oil, increased 0.57 percent to USD 113.77 per barrel. According to exchange data, foreign institutional investors continued to be net sellers on Friday in the capital market, selling shares worth a net total of Rs 2,353.77 crore.

Following monetary policy tightening by the Reserve Bank and US Federal Reserve, high oil prices, and a volatile rupee, foreign investors continue to flee Indian equities markets, with withdrawals totaling close to Rs 46,000 crore so far this month. According to depositories’ data, the net outflow of foreign portfolio investors (FPIs) from stocks has reached Rs 2.13 lakh crore so far this year.

According to Hitesh Jain, Lead Analyst – Institutional Equities at Yes Securities, FPIs are expected to steer clear of emerging market assets given the policy normalisation narrative put forth by the US Fed and other significant central banks, as well as the high price of oil and unstable rupee.