Indian Rupee: Expected To Be Under Pressure

2 May 2022 , 08:55 AM

Accruing strength in dollar after a brief pause could continue to keep the Indian rupee under pressure in opening trades on Monday, 02 May 2022. Besides, weak regional peers and equities are likely to further dampen sentiments. Nevertheless, easing crude oil prices over China economic slowdown concerns may limit sharp losses in the local currency.

On Friday, rupee appreciated 18 paise to settle at 76.43 against the US dollar. At the interbank forex market, the domestic unit opened at 76.62 against the US dollar. It moved in the range of 76.63 to 76.29 during the day trade. The rupee finally closed at 76.43, registering a rise of 18 paise over its previous close. On Thursday, the rupee had settled at 76.61 against the US currency.

Domestic equity benchmarks went into a tailspin during fag-end of the trade on Friday, dragged by weakness in Axis Bank, Reliance Industries and Infosys. The S&P BSE Sensex lost 460.19 points or 0.8% at 57,060.87. The Nifty 50 index fell 142.5 points or 0.83% to 17,102.55. Foreign portfolio investors (FPIs) sold shares worth Rs 3,648.30 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 3,490.30 crore in the Indian equity market on 29 April, provisional data showed.

The monthly collection under the Goods and Services Tax (GST) has peaked to an all-time high of Rs 1.68 lakh crore in April 2022, according to a statement by the Finance Ministry on 1 May 2022. GST collection in April was Rs 25,000 crore more than the collection in March. The cumulative growth rate of Index of Eight Core Industries (ICI) during April-March 2021-22 was 10.4% (provisional) as compared to the corresponding period of last Financial Year.

Overseas, Asian stocks are trading lower on Monday, with data released over the weekend showing Chinese factory activity contracted in April. Markets in Hong Kong, mainland China, Singapore and Taiwan are closed on Monday for a holiday. Wall Street slid on Friday to its deepest daily losses since 2020, as Amazon slumped following a gloomy quarterly report, and as the biggest surge in monthly inflation since 2005 spooked investors already worried about rising interest rates.

Meanwhile, the dollar index has resumed uptrend in early Asia after the greenback took a breather, peaking out from a 20-year high. The dollar index, that measures the greenback against a basket of currencies is currently quoting at 103.38 as treasury yields steady near 2.9% ahead of this weeks key Fed meeting and the monthly US employment data.

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