Rupee stable after early slump, ends 2 paise up at 64.10

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Mumbai, Sept 6 (PTI): The rupee recuperated from early plunge and ended with gains, though a marginal 2 paise, at 64.10 against the US dollar even as geopolitical worries continued to cast shadow over forex trading.

The domestic currency on Wednesday recorded its first gain in past four sessions. It had lost 22 paise in the last three days.

Sustained bouts of dollar demand from importers and fears over a sudden capital flight added some extra pressure in early trade along with bearish domestic equities.

The home currency tumbled to as low as 64.26 during intra-day trade, the level which was last seen on August 16.

Weak dollar overseas against the backdrop of dovish Fed comments largely supported the recovery movement, though sentiment remained jittery about North Korea.

The local currency resumed lower at 64.18 against overnight close of 64.12 at the forex market due to steady demand for the greenback and sell-off in equities.

The rupee remained under pressure and descended sharply to hit a low of 64.26 in mid-morning deals on Wednesday.

However, the domestic currency witnessed a strong rebound towards the fag-end trade on fresh dollar selling by banks and export houses and managed to settle for the day at 64.10, showing a gain of 2 paise, or 0.03 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.2146 and for the euro at 76.5438.

The dollar index, which measures the greenback’s value against a basket of six major currencies, was down at 92.18.

In cross-currency trades, the rupee continued to slide against the pound sterling to finish at 83.59 from 83.09 per pound and also drifted against the Japanese yen to end at 58.86 per 100 yens from 58.63.

The home unit also fell back against the euro to close at 76.41 from 76.21 on Tuesday.

The US dollar battered across the board after the Fed officials urged caution on raising interest rates further in the midst of soft macroeconomic data flow and looming debt ceiling deadline.

In forward market on Wednesday, premium for dollar remained weak on sustained receivings from exporters. The benchmark six-month premium payable in February declined to 126-128 paise from 129-131 paise and the far forward August 2018 contract also edged down to 264-266 paise from 268-270 paise earlier.

Domestic equities suffered a set back after a brief overnight rebound as uneasy investors resorted fresh round of profit taking on simmering worries over North Korea’s military intentions continued to undermine global risk appetite.

Benchmark Sensex slipped over 147 points to end at 31,661.97, while Nifty shed 36 points to 9,916.20.

Most Asia bourses too continued to decline on Wednesday.

Meanwhile, a Morgan Stanley report has said that India’s economic activity lost some pace amid GST related disruptions but underlying growth momentum remains strong and the country may clock 6.7 per cent growth this fiscal.

India’s economic growth slipped to a three-year low of 5.7 per cent in April-June.

On the international energy front, crude prices rose on Wednesday as strong global refining margins and the reopening of US Gulf Coast refineries provided a bullish outlook after recent steep fall due to Storm Harvey.

Brent had gained 28 cents to trade at USD 53.66 a barrel in early Asian trade, while the US West Texas Intermediate (WTI) crude futures were up 15 cents at USD 48.81.

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