The rupee gave up most of its losses to close down by 3 paise at 71.80 against the U.S. currency on August 29 even as uncertainty over the U.S.-China trade talks and recession fears kept investors on edge.
Losses in domestic equity markets and unabated foreign fund outflows hit the rupee sentiment, Forex dealers said.
At the interbank foreign exchange, the rupee opened lower at 71.96 and fell further to the day’s low of 72.09 against the U.S. dollar after inverted U.S. yields fuelled fears of a possible recession.
Positivity surrounding the U.S.-China trade talks after China indicated that it may not immediately respond to recent U.S. tariff hikes helped revive the sentiment.
Chinese currency yuan gained 0.20%, cutting short its 10-day losing streak against the dollar.
The domestic currency touched a high of 71.70 during the session before settling at 71.80, down by 3 paise.
The BSE Sensex ended 382.91 points, or 1.02%, lower at 37,068.93, while the broader NSE Nifty shed 97.80 points, or 0.89%, to finish at 10,948.30.
Foreign investors pulled out ₹986 crore on a net basis from equities on August 29, provisional exchange data showed.
“Rupee continues to take resistance around 72.20 zone, until it is trading below this the view will be bearish for dollar. However, further developments regarding U.S. China trade war will keep Chinese yuan, Indian rupee and other emerging market currencies on edge,” Rahul Gupta, Currency Research Head, Emkay Global Financial Services Limited, said.
Brent crude futures, the global oil benchmark, declined 0.08% to $60.44 per barrel as recession fears gripped markets.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08% to 98.29.
The 10-year government bond yield was up at 6.58%.
