Tag: crude oil

Rupee gains 14 paise to 74.44 against US dollar in early trade

Banking & Finance

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The Indian rupee strengthened by 14 paise to 74.44 against the US dollar in early trade on Tuesday, tracking a firm trend in the domestic equity market.

At the interbank foreign exchange, the domestic unit opened at 74.49 against the dollar, then inched higher to 74.44, registering a gain of 14 paise over its previous close.

On Monday, the rupee had settled at 74.58 against the US dollar.

Pressure on risk currencies subside, US inflation in focus

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.08 per cent down at 92.18 ahead of key CPI data tonight.

On the domestic equity market front, BSE Sensex was trading 240.87 points or 0.46 per cent higher at 52,613.56, while the broader NSE Nifty advanced 70.30 points or 0.45 per cent to 15,762.90.

Forex traders said foreign fund outflows and firm crude oil prices could weigh on investor sentiment and cap the appreciation of the local unit.

Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth ₹745.97 crore, as per exchange data.

Rupee slides toward year’s low as India’s trade deficit widens

Global oil benchmark Brent crude futures advanced 0.25 per cent to $75.35 per barrel.

On the domestic macro-economic front, retail inflation remained above the RBI’s comfort level for the second consecutive month despite slipping slightly to 6.26 per cent in June, while the factory output recorded a growth of 29.3 per cent in May, mainly on account of the base effect.

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Indian bond yields spike to near 4-month highs; crude surge hurts, BFSI News, ET BFSI

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MUMBAI – Indian bond yields jumped on Tuesday as a rally in global crude oil prices raised worries about higher imported inflation, while a selection of papers for this week’s bond buyback by the central bank also disappointed investors.

The most-traded 6.64% 2035 bond was up 6 basis points at 6.79%, while the second-highest traded 5.63% 2026 paper rose 7 bps to 5.83%. Both bonds were trading at levels last seen in mid-March.

The 10-year bond, which is likely to be soon replaced as the benchmark paper, was up 6 bps at 6.15%, its highest since April 16.

HDFC Bank said rising oil prices and lack of liquid papers in this week’s government securities acquisition programme (GSAP) or a form of quantitative easing programme of the Reserve Bank of India, is weighing on bond prices.

“The market was hoping for the inclusion of the 5-year paper in the upcoming debt purchase given the recent devolvement of the paper by the RBI.” HDFC economists wrote.

Underwriters to the auction or the primary dealers had to buy 104.95 billion rupees ($1.41 billion) worth of the 5.63% 2026 bonds at the debt sale last week.

The central bank is scheduled to sell 260 billion rupees worth of bonds on Friday, including 140 billion rupees worth of a new 10-year paper.

RBI announced a buyback of bonds worth 200 billion rupees on Thursday under the GSAP but traders said most securities it has proposed to buy are illiquid and would not necessarily help tame yields and offset the impact of high global crude oil prices.

Oil prices hit some of their highest levels since 2018 after OPEC+ discussions were called off, heightening expectations that supplies will tighten further just as global fuel demand recovers from a COVID-19-induced slump.

India imports more than two-thirds of its oil requirements and higher prices usually translate to higher inflation.

The central bank has voiced to keep rates low to support the economic recovery but rising inflation could force its hand, traders fear.

“Another added pressure for the short end of the curve is the additional borrowing for GST (goods and services tax) compensation shortfall that is likely to be done starting July by selling bonds at shorter tenures (less than 7 years).”

In late May, the government said it will borrow an additional 1.58 trillion rupees to compensate states for their shortfall in revenues.



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Rupee falls 10 paise to 74.20 against US dollar in early trade

Banking & Finance

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The Indian rupee slumped 10 paise to 74.20 against the US dollar in opening trade on Tuesday as rising crude oil prices weighed on investor sentiment.

At the interbank foreign exchange, the rupee opened lower at 74.18 against the dollar, then fell further to 74.20, registering a fall of 10 paise over its previous close.

Also read: Rupee closes down 24 paise at 74.10 a dollar

On Monday, the rupee had settled at 74.10 against the US dollar.

“Asian currencies have started weak against the greenback this Tuesday morning and surging crude oil prices could continue to keep appreciation bias limited,” Reliance Securities said in a research note.

Global oil benchmark Brent crude futures rose 0.32 per cent to $75.14 per barrel.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 0.03 up 91.93 per cent.

“The US dollar index was flat this morning in Asian trade ahead of the Fed Chairman Powell testimony tonight. Investors will wait and watch if he confirms the hawkish outlook or tries to row back market expectations of faster tightening,” the Reliance Securities’ note said.

On the domestic equity market front, the BSE Sensex was trading 471.17 points or 0.90 per cent higher at 53,045.63, while the broader NSE Nifty advanced 144 points or 0.91 per cent to 15,890.50.

Foreign institutional investors were net sellers in the capital market on Monday, offloading shares worth ₹1,244.71 crore, as per exchange data.

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Rupee slips below 75/$ level in early trade ahead of key macroeconomic data release

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The rupee opened on a weak note and fell below the 75 per US dollar level in early trade on Monday amid lacklustre opening in domestic equities ahead of the release of key macro-economic data.

Moreover, rising crude oil prices, foreign fund outflows, spiking Covid-19 cases and heavy selling in domestic equities weighed on the domestic currency.

At the interbank foreign exchange market, the rupee opened at 74.97, then lost further ground and fell to 75.14 against the US dollar, showing a decline of 41 paise over its previous closing.

The Indian rupee, on Friday, had closed at 74.73 against the US dollar.

The rupee started on a weak note against the US dollar weighed by the inflationary pressures on the economy ahead of the data release tonight, Reliance Securities said.

Meanwhile, India hit a new coronavirus infection record with 1,68,912 new cases, the highest single-day rise so far, taking the total tally of cases to 1,35,27,717, according to official data.

Meanwhile, Brent crude futures, the global oil benchmark, rose 0.05 per cent to $62.98 per barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out ₹653.51 crore on Friday, as per provisional data.

Domestic bourses opened on a weak note on Monday with benchmark indices Sensex trading 1,357.46 points down at 48,233.86 and Nifty down 402.35 points at 14,432.50.

Meanwhile, US consumer price data will be released on Tuesday, while investors will also await Fed Chair Jerome Powell’s speech on Wednesday at the Economic Club of Washington, the note said.

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