Rupee drops 9 paise to 73.77 amid strong dollar, weak equities

The Indian rupee opened on a flat note at 73.81 per US dollar and traded in a narrow range on Wednesday, as investors were cautious after the first US Presidential debate.

Rupee opened at 73.81 per US dollar on the interbank forex market, then gained ground to touched 73.86 as against Tuesday's close of 73.86 per US dollar.

However, the domestic unit fell by 9 paise and traded at 73.77 against the greenback, tracking selling pressure from domestic equity markets.

The dollar index rose 0.04 per cent to 93.92 against a basket of six currencies.

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Traders said investors were cautious after the first US Presidential debate. The dollar index rose today after first round of presidential debate involving United States President and Republican Party candidate Donald Trump and his rival from the Democratic Party Joe Biden.

Moreover, month-end dollar bids and equity-related outflows also weighed on market sentiments.

On Rupee's outlook, Vaqarjaved Khan - Research Analyst, Angel Broking said," With easing monetary policy from US FED here to stay, USDINR ( 73.7) is likely to move lower towards 72.5 in the coming week. (28th Sep- 2nd Oct 2020). In the week gone by Indian rupee depreciated by 0.06 percent and currently stands at 73.7 against the US dollar. "

On the domestic equity market front, Indian benchmark indices turned volatile and traded in a narrow range, tracking weak cues from global equities. In a volatile trading session today, Sensex was trading at 37,972, up 2 points and Nifty gained by 4 points to trade at 11,277.

Foreign portfolio investors (FPIs) sold shares worth Rs 26.98 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 542.34 crore in the Indian equity market on 29 September, provisional data showed.

Brent crude futures, the global oil benchmark, fell 1.15 per cent to USD 40.56 per barrel. Oil price fell on concerns over fuel demand as US and Europe are possibly witnessing second wave of coronavirus infection.

Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking said," Oil prices might be under pressure as bleak economic outlook reflecting the resurgence of COVID-19 virus undermined the outlook for Crude. On the MCX, oil prices are expected to trade lower today."

Worldwide, there were 338 lakh confirmed cases and 10.12 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 62-lakh mark and the death toll from COVID-19 infections rose to 0.97 lakh, as of today. 

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