As what I have predicted since last week in my previous thread, this event will pressure Indian Rupee
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Dont just see on Adani, what would happen on Indian stock market for the next week as confident on Indian stock market will likely plunge over this issue. The possible huge outflow of foreign investors in Indian Stock market will likely hurt Rupee as well for the next weeks to come If they...
INDIA RUPEE-Rupee weakens past 82/USD hit by equity market turbulence
MUMBAI, Feb 2 (Reuters) - The Indian rupee closed at a more than three-week low on Thursday, shrugging off weakness in the dollar index, as concerns over a rout in local equities seeped into the currency markets.
The partially convertible rupee INR=IN fell to 82.1725 per dollar, compared with its previous close of 81.92.
The currency had briefly flirted with 82-levels in the past two sessions but was unable to sustain its post-budget gains on Wednesday, mirroring the volatility in equities.
The mood on Thursday was dominated by turbulence in the equities as the selloff Adani Group shares persisted, dragging the benchmark stock index down after the conglomerate shelved its fully-subscribed secondary share offering overnight.
The rupee's marginal strength earlier in the session was not going to last as heavy dollar buying was expected, three traders said.
Foreign banks have been bidding all through this week for USD/INR, they said, pointing to the chances of custodial banks among them as overseas investors sought to withdraw money from Indian markets.
Foreign institutional investors have withdrawn around $3.5 billion from stock markets in January alone.
The rupee, which has already been underperforming its Asian peers, will likely stay under pressure from these developments, said Alvin Tan, head of Asia FX strategy, RBC Capital Markets.
Meanwhile, Asian currencies and stocks nudged up as Fed Chair Jerome Powell acknowledged that U.S. inflation had started to cool after the central bank raised rates by an expected 25 basis points.
However, he did signal that interest rates would rise further and that cuts were not in the offing, but markets continued to cheer the likelihood of the Fed rate peaking soon, with the dollar index USD= plunging more than 1% overnight.
nvestors will now be on the lookout for the central bank meetings in Europe an England later in the day, when both are expected to hike rates by 50 bps.
(Reporting by Anushka Trivedi;Editing by Dhanya Ann Thoppil)