Rupee weakens against dollar over volatility in domestic equity markets

Mumbai: The Indian rupee on Tuesday weakened marginally against the US dollar, after local equity markets wiped out most of the gains.

At 2pm, the rupee was trading at 68.23 a dollar, down 0.08% from its previous close of 68.17. The home currency opened at 68.11 against the US dollar and touched a low of 68.27 a dollar—a level last seen on 1 March. So far this year, it fell 2%.

Earlier in the morning, Sensex gained as much as 270 points but soon erased most of the gains. India’s benchmark Sensex index was trading at 25,838.80 points, up 0.29% or 73.66 points from its previous close. So far this year, it has fell 1%.

Since 9 to 18 September, FIIs sold $1.52 billion in equity and from 11 to 18 September, FIIs sold $2.06 billion in debt. FIIs have sold $2.34 billion in debt and bought $5.30 billion in equity till date this year.

The benchmark 10-year government bond yield was trading at 6.316%, compared to Monday’s close of 6.311%. Bond yields and prices move in opposite directions.

South Korea’s won outperforms in Asia as rally in local stocks help reverse three days of losses. Early yen gains on earthquake in Fukushima proved short-lived as US yields recovered. Most Asian currencies are mixed to lower, according to Bloomberg report.

South Korean won was up 0.89%, Taiwan dollar 0.25%, Thai Baht 0.17%, China renminbi 0.05%. However, Malaysian ringgit was down 0.26%, Philippines peso 0.19%, Indonesian rupiah 0.15%, China Offshore 0.08%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.98, down 0.09% from its previous close of 101.05.