Rupee rebounds 19 paise to 72.20 against USA dollar in opening trade

Andrew Cummings
September 4, 2019

Mumbai: Benchmark indices Sensex and Nifty 50 fell more than two per cent on Tuesday over mounting slowdown worries, as reflected in the latest economic data, escalation in US-China trade war and rapidly weakening local currency.

The Indian rupee has extended the morning gains and trading higher by 28 paise at 72.11 per dollar versus Tuesday's close of 72.39.

Mumbai: The Indian rupee on Wednesday opened marginally stronger in line with its Asian peers amid dollar weakness and signs of contraction in United States manufacturing.

The dollar index, which measures the USA currency's strength against a basket of major currencies, was at 98.913, down 0.09% from its previous close of 99.

Incessant heavy selling by the foreign portfolio investors (FPIs), who dumped equties worth Rs 2,016.20 crore, led to panic selling even in the broader market as it opened after a long weekend.

Global oil benchmark Brent crude fell 1.07 per cent to 58.03 per barrel (intra-day).

The 10-year government bond yield was at 6.515% compared with its previous close of 6.521%.

A separate private-sector survey indicated that expansion in the country's manufacturing sector hit its slowest in 15 months in August, as demand and output grew at their weakest pace in a year and cost pressures increased.

The gross domestic product (GDP) growth figure for the quarter ended June, released after market hours on Friday, came in at 5 per cent, the slowest in over six years and much below consensus estimates.

The BSE Sensex crashed about 770 points and the NSE Nifty dived over 225 points after investors indulged in panick selloffs as dismal GDP print, weak core sector growth and disappointing auto sale numbers pointed to deepening economic crisis in the country.

Growth of eight core industries also dropped to 2.1 per cent in July, mainly due to contraction in coal, crude oil and natural gas production, according to a government data released on Monday.

Moreover, the lingering US-China trade war and Brexit fears dragged the domestic currency, traders said. "While I am sure they would love to be dealing with a new administration so they could continue their practice of "ripoff USA" ($600 B/year), 16 months plus is a long time to be hemorrhaging jobs and companies on a long-shot.", Trump said in a tweet Tuesday.

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