Rupee drops 6 paise to 76.20 against dollar amid COVID-19 concerns

(Eds: Adds expert comment)

Mumbai, Jun 19 () The rupee settled 6 paise lower at 76.20 against the US dollar on Friday as strengthening of the US currency and rising COVID-19 cases weighed on investor sentiment.

Forex traders said factors like strengthening US dollar, rising coronavirus cases and border tension between India and China dragged down the local unit.

Positive domestic equities and fresh foreign fund inflows, however, supported the rupee and restricted the decline to some extent.

The rupee opened at 76.28 against the US dollar and rose to an intra-day high of 76.17. The rupee finally settled at 76.20 against the US dollar, down 6 paise over its previous close.

It had settled at 76.14 against the greenback on Thursday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 97.44.

The 30-share BSE benchmark Sensex closed 523.68 points, or 1.53 per cent, higher at 34,731.73. The broader NSE Nifty surged 152.75 points or 1.51 per cent to 10,244.40.

Foreign institutional investors were net buyers in the capital market as they bought shares worth Rs 366.57 crore on Thursday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 2.51 per cent to USD 42.55 per barrel.

On a weekly basis, the domestic unit as depreciated by 36 paise. It had settled at 75.85 on June 12.

"Investors focus is basically swinging between coronavirus second pandemic wave and Indo-China border issue. And this uncertainty has acted to pause the major movement in USD/INR spot," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Gupta further noted that "the risk sentiments will remain on tenterhooks until there's a truce between India-China. In spot, 75.75 will continue to act as an immediate support with 76.50 being the resistance."

China on Friday said that "presently", it has not detained any Indian soldiers, amidst reports that the Chinese military took some Indian troops captive after a deadly clash in the Galwan Valley on June 15.

The brief statement of the Chinese Foreign Ministry spokesman Zhao Lijian came a day after the Indian Army said that all Indian soldiers involved in the clashes with the Chinese army at the Galwan Valley in eastern Ladakh on Monday night have been accounted for.

Traders said investor sentiment remain fragile amid rising coronavirus cases across the world.

The number of cases around the world linked to the disease has crossed 85.07 lakh and the death toll has topped 4.54 lakh.

In India, the death toll due to COVID-19 rose to 12,573 and the number of infections spiked to 3,80,532, according to the health ministry.

Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 76.1509 and for rupee/euro at 85.6916. The reference rate for rupee/British pound was fixed at 95.5816 and for rupee/100 Japanese yen at 71.21. DRR MR MR