Rupee plunges below 67 against dollar as oil hits $75

The Indian currency has been the worst performer this year so far, losing 5.10 per cent since January.

The NSE 50-share Nifty spurted 97.25 points, or 0.92 per cent, to 10,715.50 after shuttling between 10,725.65 and 10,635.65. (Express photo by Ganesh Shirsekar/Files)

The rupee on Monday plunged below the 67-mark to close at a 15-month low of 67.13 against the US dollar as crude oil prices zoomed past the $75 per barrel level and demand for the dollar surged. However, the 30-share Sensex rallied 293 points to finish at 35,208.14, while the broad-based Nifty reclaimed the 10,700-level with a 97-point jump.

Dealers said Monday’s is the lowest level for the Indian unit since February 8, 2017 when it had ended at 67.19 against the US dollar. They said there was huge dollar purchases by oil importing companies. While importers rushed to cover their obligations, exporters cancelled their previously booked forward contracts on growing expectation of a further fall in the rupee value near term. The rupee fell sharply to a low of 67.18 in late afternoon-deals before concluding at 67.13, revealing a steep loss of 26 paise, or 0.39 per cent.

The Indian currency has been the worst performer this year so far, losing 5.10 per cent since January. The sudden jump in global crude prices rattled the forex market sentiment in a big way stoking concerns over widening trade deficit and higher capital outflows. As

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India is a net crude oil importer, a sharp rise in prices can affect the import bill and disrupt the fiscal position.

Crude oil jumped to its highest levels since late-2014 on Monday to cross the significant $75 a barrel tag boosted by Venezuela’s deepening economic crisis and a looming decision on whether the United States will re-impose sanctions on Iran. Brent crude, an international benchmark, was trading at $75.57 a barrel in early Asian trade.

“FIIs continue to be net sellers in Indian equities, adding further pressure on the rupee. To this end, CPI release scheduled later this week will be viewed with interest. Markets participants also watched the RBI’s recent move to conduct OMO; to buy government bonds worth up to Rs 10,000 crore on May 17,” said Anand James, Chief Market Strategist at Geojit Financial Services. Foreign investors have pulled out over Rs 22,000 crore from the debt market in the last three months and around Rs 8,400 crore from the equity market in the last two months amid the surge in global crude prices and rise in yields of government securities.

Meanwhile, benchmark Sensex surged past the 35,000-mark as earnings optimism and bargain hunting sparked a sustained mid-session upswing amid mixed overseas cues. The BSE benchmark Sensex opened higher at 34,983.59 and hovered in a range of 35,259.81 to 34,977.74 before finishing at 35,208.14, showing a gain of 292.76 points or 0.84 per cent. This is its highest closing since February 1, 2018, when it had finished at 35,906.66.

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The NSE 50-share Nifty spurted 97.25 points, or 0.92 per cent, to 10,715.50 after shuttling between 10,725.65 and 10,635.65.

M&M was the biggest gainer in the Sensex kitty, rising 3.68 per cent, followed by Axis Bank, which advanced 2.82 per cent. ICIC Bank jumped 2.30 per cent ahead of its results. Among the sectoral indices, metal climbed 1.68 per cent, oil and gas 1.64 per cent, realty 1.51 per cent, consumer durables 1.45 per cent, auto 1.43, PSU 1.18 per cent, infrastructure 1.13 per cent, bankex 1.12 per cent, capital goods 1.12 per cent, FMCG 1.12 per cent and power 0.50 per cent. Healthcare fell 0.53 per cent and IT shed 0.01 per cent. Ruchi Soya rallied 7.09 per cent as the race to acquire the debt-laden firm heats up.

Abhijeet Dey, senior fund manager, BNP Paribas Mutual Fund, said: “The mood in stock markets, both in India as well as globally seems to be upbeat. Globally, investors digested the trade talks between the US and China. Both sides recognise that there are still big differences on some issues and they need to continue to step up their work to make progress. Investors remained skittish over the outcome of these talks. On the sectoral front, while the information technology and healthcare indices traded with losses, strong gains of over one per cent were seen in most of the other sectoral indices.”