Rupee falls 44 paise to close at 94.82 against US dollar

The rupee fell 44 paise to close provisionally at 94.82 against the US dollar amid rising crude oil prices and weakness in domestic equities. Meanwhile, the dollar index eased, while Jio Platforms' IPO attracted strong investor demand on Thursday

Mumbai: The rupee slumped 44 paise to close at 94.82 (provisional) against the US dollar on Thursday, weighed down by a negative trend in domestic equity markets and surging crude oil prices.

According to forex analysts, the rupee began trading on a flat-to-lower trajectory due to sluggish domestic equities and surging crude oil prices.

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Escalating attacks by Yemeni Houthis on Saudi Arabia’s energy infrastructure deteriorated global market sentiment, they said, adding that a softening dollar index and a decline in US Treasury yields cushioned the downside.

At the interbank foreign exchange market, the rupee opened at 94.47 against the dollar, then lost ground to touch an intra-day low of 94.94 before settling at 94.82 (provisional), registering a decline of 44 paise from its previous close.

On Wednesday, the rupee surged 53 paise to close at 94.38 against the dollar.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.17 per cent lower at 101.60.

Forex traders said near-term dollar liquidity had improved following the Jio IPO, with potential structural inflows supported by hopes of a US trade agreement.

However, this stability remains vulnerable to renewed foreign portfolio outflows or a spike in crude oil prices towards USD 120 per barrel.

Brent crude, the global oil benchmark, was trading 3.23 per cent higher at USD 112.33 per barrel in futures trade.

“Brent crude surged 3 per cent following attacks on Saudi Aramco’s oilfield, as well as media reports suggesting an escalation in the West Asia conflict after the US midterm elections,” said Sunny Aggrawal, Head of Fundamental Research at SBI Securities.

On the domestic equity market front, the Sensex fell 460.30 points to settle at 73,249.39, while the Nifty dropped 123.70 points to 22,687.65.

Foreign Institutional Investors (FIIs) purchased equities worth Rs 1,022.32 crore on a net basis on Wednesday, according to exchange data.

Meanwhile, the retail portion of Jio Platforms’ initial public offering was fully subscribed within two hours of the start of the second day of bidding on Thursday.

Qualified Institutional Buyers led the demand, with their portion subscribed 9.42 times, followed by non-institutional investors at 2.34 times. The shareholders’ portion was subscribed 2.06 times, while the employees’ quota saw 1.61 times subscription.

Overall, the issue was subscribed 3.47 times as of 11 am on the second day, according to exchange data.