The Indian rupee has opened the week at a vulnerable 71.49 against the dollar, on the back of poor start to the week by the Indian equity markets and growing fear of the newly discovered virus in China.
The Indian rupee is expected to stay volatile this week, leading to the Union Budget 2020-21 and Federal Open Market Committee (FOMC) meeting. The panic set in by the new virus in China can have adverse effects on the markets.
The Indian rupee closed at 71.33 on Friday. It opened 0.15% lower on Monday and was trading at 71.44 against the US dollar at 10.30 a.m. However, the rupee has grown 0.8% on the YTD basis (year-to-date).
Coming to the domestic markets, the BSE Sensex and NSE Nifty have opened in red on Monday. At 12 noon, the BSE Sensex was down by 159 points while the NSE Nifty was trading 50 points lower. It is interesting to see how markets play in the Budget week.
As per the data provided by the exchanges, the foreign institutional investors (FII) pumped in as much as Rs 659.11 crore whereas the domestic investors sold equities of worth nearly Rs 418 crore on Friday.
The prices of crude oil have collapsed over 2% on Monday. This is attributed to the outbreak of new coronavirus in China. Many Chinese cities have been on lockdown, raising concerns over the demand for the oil.
The situation has not improved although the energy minister of Saudi Arabia tried calming the market down. Brent crude has fallen 2.2% (USD 1.36) per barrel, and it is now priced at USD 59.33, which happens to its lowest since last October. The US crude was down 2.4% (USD 1.30) to trade at USD 52.89, which is its lowest in three months.
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