The rupee fell nearly 0.6% against the dollar on Wednesday, with bearish sentiment as the country’s growth estimates fell short of expectations and as the escalation from Russia’s invasion of Ukraine continued to agitate. serious risk.
A significant consequence of Western sanctions against Russia after the country began a “special operation” in Ukraine was a sharp increase in oil prices, breaching the $110/barrel mark for the first time in seven years.
The energy-sensitive rupee ended at 75.77, down nearly 0.6% from the previous close of 75.33 on Monday. Indian markets were closed on Tuesday due to Mahashivratri.
“USDINR (dollar/rupee) closed 36 paise at 75.70 on rising oil prices. The intervention of the Reserve Bank of India (RBI) could be to blame for the pair not to outperform the level. 75.85”, said Anindya Banerjee, Vice President, President, Currency Derivatives and Interest Rate Derivatives at Kotak Securities.
He added: “In the near-term, we expect the price to trade with the upside. We see range at the 75.40 and 76.30 levels.”
Data showed India’s economy grew by 5.4% in the October-December quarter, a pace slower than the previous two quarters and 6% lower than economists had predicted in a poll of economists. Reuters.
That data is available for a period of time even before the disruptions and new restrictions from the omicron variant of the coronavirus were in place.
Now, there is growing concern that the fallout from Russia’s invasion of Ukraine could slow economic growth.
Investors’ sour mood was reflected on domestic exchanges, with BSE Sensex falling 1.38% to 55,469 and the broader NSE Nifty dropping 1.12% to 16,606.
Prashanth Tapse, vice president of research, said: “Nifty is down as the focus remains on geopolitical tensions. Russia’s invasion of Ukraine continues to hurt Nifty benchmarks as investors remain resilient. risk aversion as oil prices surge to their highest levels since 2013.” at Mehta Equities.
He added: “We suspect the market will act like a wild and any attempt at a weak recovery will again be brushed aside by the bears around the 17000-17150 zone of Nifty.
