Foreign institutional investors have withdrawn more than $17.5 billion from domestic equities and debt over the past four months.
Foreign institutional investors have withdrawn more than $17.5 billion from domestic equities and debt over the past four months.
The rupee recouped early losses to trade almost unchanged at 76.55 (prelim) against the US dollar on Wednesday on expectations of higher dollar inflows.
However, a lackluster trend in domestic stocks and the dollar’s strength in the overseas market weighed on the local entity, forex traders said.
In the interbank FX market, the domestic unit opened at 76.69 against the US dollar, hitting a daily high of 76.50. It finally closed at 76.55, up just 1 paisa from its previous close of 76.56.
According to HDFC Securities Research analyst Dilip Parmar, the rupee managed to pare its early morning losses and offset with a modest gain on expectations of dollar inflows from initial public offerings (IPOs) and corporate dollar sales.
“Most Asian currencies are down against the US dollar, while Chinese yuan strength supported local unity,” Mr Parmar said.
The US Federal Reserve’s move to more aggressive rate hikes is leading to capital outflows from emerging markets, including India, which has increased pressure on the rupee against the US dollar.
Foreign institutional investors have withdrawn more than $17.5 billion from domestic equities and debt over the past four months.
“Spot USD/INR is expected to trade in the 76.30-76.75 range with the short-term bias remaining bullish while holding 76.40,” noted Mr. Parmar.
Meanwhile, the Dollar Index, which gauges the dollar’s strength against a basket of six currencies, traded 0.27% higher to 102.58.
In the domestic stock market, the 30-stock BSE Sensex ended 537.22 points, or 0.94%, lower at 56,819.39, while the broader NSE Nifty fell 162.40 points, or 0.94%, to 17,038.40.
Brent crude futures, the global oil benchmark, rose 0.62% to $105.64 a barrel.
Foreign institutional investors were net sellers in the capital market on Tuesday, selling 1,174.05 crore of shares, according to stock market data.
