Rupee trades in narrow range; crude prices, global tensions weigh on sentiment

Rupee traded in a narrow range against the US dollar in early trade on Wednesday, pressured by rising crude oil prices and continued risk-off sentiment due to geopolitical tensions.

At the interbank foreign exchange, the rupee opened at 86.42 against the dollar and briefly strengthened to 86.25 in early deals. On Tuesday, it had declined by 30 paise to settle at 86.34.

Forex analysts noted that tensions in the Middle East, strong demand for the dollar from oil importers, and investor caution are weighing on the local currency.

"Middle East tensions are fueling safe-haven flows, pulling investors toward the dollar and away from the emerging markets. With global winds blowing in favour of the greenback, the rupee remains under pressure," CR Forex Advisors MD - Amit Pabari said, as PTI quoted.

Also Read:Currency Market News: Rupee falls 19 paise to 86.23 vs US dollar

The dollar index, which measures the greenback against six major currencies, was down 0.16 per cent at 98.66. Brent crude, the global oil benchmark, rose 0.42 per cent to $76.77 per barrel on concerns about supply disruption from the Iran-Israel conflict.

Equity markets open lower

Domestic equity markets opened lower on Wednesday, mirroring weak global cues as investors tracked developments in the Middle East. The Nifty50 opened down 60 points, or 0.24 per cent, at 24,793.1. The BSE Sensex declined 219.97 points, or 0.27 per cent, to 81,363.33.

Also Read:First Trade: Indices open weak as Middle East tensions escalate; Nifty below 24,800 

The Bank Nifty index was also down by 171.95 points, or 0.31 per cent, to 55,542.2.

Broader markets underperformed, with the smallcap index falling nearly 0.8 per cent and midcaps also trading in the red.

In early trade, top gainers on the Nifty 50 included HCL Tech, ONGC, Trent, Asian Paints, and TCS. On the other hand, Kotak Mahindra Bank, JSW Steel, HDFC Bank, NTPC, and Bajaj Finance were among the top losers. Foreign institutional investors (FIIs) bought shares worth Rs 1,482.77 crore on a net basis on Tuesday, according to exchange data.