The Indian rupee started the week on a weaker note, declining against the US dollar in early Monday trade. Persistent selling by foreign investors and rising global crude oil prices acted as major headwinds for the domestic currency.
Rupee Opens Lower Amid Global Pressures
The local unit opened at 90.23 against the US dollar, marking a fall of 5 paise from its previous close. This extends the losing streak from Friday, when the rupee had depreciated by 28 paise to end the session at 90.18 versus the greenback.
Currency traders attributed the weakness to multiple factors. Ongoing geopolitical tensions and concerns over potential US tariffs on Indian exports prompted foreign institutional investors (FIIs) to continue offloading Indian equities. Data showed FIIs sold shares worth a substantial Rs 3,769.31 crore just on Friday.
Macro Data and Global Cues in Focus
Market participants are now keenly awaiting key macroeconomic data releases this week for clearer direction. The sentiment was also dampened by the Reserve Bank of India's latest weekly data, which revealed that the country's foreign exchange reserves fell by $9.809 billion to $686.801 billion in the week ending January 2.
On the global front, the dollar index, which measures the US currency's strength against a basket of six majors, was down 0.14% at 98.75. However, global crude oil prices edged higher, adding to India's import bill concerns. Brent crude futures were trading 0.13% higher at $63.44 per barrel.
Equity Markets Mirror Subdued Sentiment
The negative cues from the currency and global markets spilled over to domestic equities. Reflecting the risk-off mood, benchmark indices opened in the red. The Sensex fell 356.49 points (0.43%) to 83,219.75, while the Nifty lost 94.90 points (0.37%) to 25,588.40.
Analysts pointed to a combination of international developments affecting investor confidence. These include evolving situations in Venezuela and Iran, along with other geopolitical remarks. The confluence of these factors has created an environment of caution, leading to the rupee's weakness and the sell-off in stocks as market players seek safer havens.
