Indian Rupee: Massive Sell-Off In Equities Could Weigh

23 Aug 2022 , 08:55 AM

Pause in sharp dollar rally is expected to provide some support to the Indian rupee in opening trades on Tuesday. However, massive selloff in equities, rising crude prices and high risk aversion ahead of Jackson Hole symposium could weigh down the domestic unit. The dollar index that measures the greenback against a basket of currencies is quoting at 108.86. On Monday, rupee recovered early losses to close flat at 79.84 against the US dollar. At the interbank foreign exchange market, the local currency opened weak at 79.90 and moved in a range of 79.78 to 79.92 during the session. It finally settled unchanged at 79.84 against the US dollar. Domestic headline equity indices tumbled on Monday, tracking negative global cues. Rising dollar index and higher US 10-year bond yield spooked investors. The barometer index, the S&P BSE Sensex, slumped 872.28 points or 1.46% to 58,773.87. The Nifty 50 index lost 267.75 points or 1.51% to 17,490.70. Foreign portfolio investors (FPIs) sold shares worth Rs 453.77 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 85.06 crore in the Indian equity market on 22 August, provisional data showed. Overseas, Asian stocks are trading lower on Tuesday after major indexes on Wall Street finished their worst day since June amid mounting rate hike concerns. US stocks fell sharply Monday, in its worst day since June, as the summer rally fizzled out and fears of aggressive interest rate hikes returned to Wall Street. Investors are anticipating what could be a volatile week of trading ahead of Federal Reserve Chairman Jerome Powells latest comments on inflation at the central banks annual Jackson Hole economic symposium. Powered by Commodity Insights