Rupee opens on flat note against US dollar in early trade; Underperformance partly due to election worries

The rupee opened on a flat note against the US dollar in early trade on Friday, weighed down by a negative trend in domestic equities and the strength of the American currency in the overseas markets. Forex traders said The Indian rupee underperformed among the Asian currencies amid higher imported commodity prices and foreign fund outflows amid worries about election results.

At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.50 against the American currency and touched 83.49 in the initial trade.

On Thursday, the rupee had settled at 83.50 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 104.61, higher by 0.15 per cent.

Brent crude futures, the global oil benchmark, rose 0.26 per cent to USD 83.49 per barrel.

"Indian rupee was again sold off despite gains in other Asian currencies on Thursday and closed at RBI-controlled level of 83.50," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Bhansali further noted that the rupee is likely to trade in a narrow range of 83.45 to 83.55 during the day.

On the domestic equity market, the 30-share BSE Sensex was trading 196.15 points, or 0.27 per cent lower at 73,467.57 points. The broader NSE Nifty was down 44.00 points, or 0.2 per cent, to 22,359.85 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 776.49 crore, according to exchange data.