The Indian rupee is expected to stay on the side lines with a negative bias in early trades on Tuesday, 25 January 2022 amid strength in the dollar overseas. Besides, weak global cues and sustained foreign fund outflows from Indian markets are also likely to weigh down the Indian unit. Meanwhile, all eyes have shifted to the upcoming Fed policy for further cues.
On Monday, rupee slumped by 19 paise to settle at 74.62 against the US dollar. At the interbank foreign exchange market, the local currency opened at 74.43 against the greenback and witnessed an intra-day high of 74.42 and a low of 74.69 during the session. The rupee finally settled at 74.62, down 19 paise or 0.26 per cent over its previous close of 74.43.
Domestic benchmark indices logged substantial losses on Monday as a result of weak global cues. The barometer index, the S&P BSE Sensex, tumbled 1,545.67 points or 2.62% to 57,491.51. The Nifty 50 index slumped 468.05 points or 2.66% to 17,149.10. Foreign portfolio investors (FPIs) sold shares worth Rs 3,751.58 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 74.88 crore in the Indian equity market on 24 January, provisional data showed.
Overseas, Asian stocks are trading lower on Tuesday after a volatile session overnight on Wall Street. Wall Street bounced back from a steep sell-off late in the session to close higher on Monday, with bargain hunters pushing the indexes into positive territory by closing bell.
Investors are eyeing the Feds policy meeting, which begins on Tuesday and wraps up Wednesday. Market participants will be looking for any signals on how much the central bank will raise interest rates this year and when it will start. Geopolitical tensions are in focus, with fears of a Russian invasion of Ukraine growing, as the military buildup at the border shows no sign of dissipating and crisis talks remain at an impasse, as per reports.
Meanwhile, the dollar index, which measures the greenback against six major peers, climbed to 95.98, after climbing as high as 96.135 overnight for the first time since Jan. 10. The safe-haven currency hovered near a two-week high against its major peers on Tuesday amid escalating worries about both a faster pace of Federal Reserve policy tightening and potential military conflict in Ukraine.
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