The Indian rupee opened weak in early trade on Friday at the Interbank Foreign Exchange, as the Brent crude prices, cautious opening in domestic equities and foreign fund outflows weighed on the local unit. After opening at 69.12, the local currency fell to 69.14 against the US dollar, showing a decline of 10 paise over its previous closing of 69.04. The local unit, however, pared some losses and was trading at 69.05 against the dollar later.
Forex traders said the weakening of the American currency added support to the local unit and restricted the downfall. The net investment of equity and debt reported by Foreign Portfolio Investment (FPIs) remained bearish with net selling Rs 126.65 crore from Indian equities while Domestic institutional investors (DIIs) bought Rs 398.53 crore Thursday. Domestic equity benchmarks BSE Sensex and NSE Nifty opened on a cautious note on Friday, accompanying global equities, amid sustained foreign fund outflow.
Benchmark indices BSE Sensex fell 90.13 points to 37,737.62 and Nifty traded 25.35 points lower at 11,226.80. As per market experts, while weak corporate earnings, foreign fund outflow dragged the market down, hopes of above-average rainfall in the next two weeks provided mild support. Although later the market recovered from early trade losses and traded on a bullish note, with Sensex rising to 37,900 and Nifty trading above 11,280 level, backed by gains in Pharma, Auto and Banking stocks.
On the global front, Asian share prices opened with minor losses on Friday and followed their US counterparts that fell from record highs amid mixed US earnings reports. European shares ended lower too after European Central Bank (ECB) left key interest rates unchanged in its policy decision on Thursday, though officials said a cut was certain in September. Other major global cues that are going to dictate the trend in the currency market include the US second-quarter preliminary GDP print on Friday and the Federal Open Market Committee (FOMC) meeting on July 31. Meanwhile, Brent crude futures, the global oil benchmark, rose 0.09 per cent to USD 63.45 per barrel.
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