Mumbai: The Indian rupee and government bond prices fell on Monday as a surge in global crude prices following a drone attack on Saudi Arabia's oil facilities stoked inflationary and fiscal slippage concerns.

Having opened at 71.57 to a dollar, the Indian currency touched a high of 71.68. At 9.15 am, the local currency traded at 71.51, down 0.85% from Friday's close of 70.93.

The yield on the 10-year Indian government bond surged 9 basis points to 6.73% compared with the previous close of 6.637%. Bond yields and prices move in opposite directions.

Global benchmark Brent crude futures soared nearly 20% or $11.7 to $66.91 per barrel in early trade today, while US West Texas Intermediate crude futures jumped $8.49, or 15.48%, to $59.76 per barrel.

Analysts said the surge in crude prices coincides with the slowdown in the domestic economy and a persistent rise in consumer price inflation, and therefore is a cause of concern. Recent data showed that retail inflation touched a 10-month high of 3.21% in August.

CR Forex Advisors expect the rupee to trade in a broad range of 70.80-71.80 level for the next few sessions, and once global panic is subsided, the pair shall normalize and trade on a stable to stronger note.

Meanwhile, the benchmark equity index Sensex was down 0.48% at 37204.56 points. So far this year, the index has risen 3.65%.

In the year so far, the rupee has weakened 2.44%, while foreign investors have bought nearly $6.85 billion in Indian equities and $4.70 billion in debt.

Other Asian currencies also traded lower. Philippines peso was down 0.58%, South Korean won 0.56%, Indonesian rupiah 0.52%, China Offshore 0.27%, Taiwan dollar 0.18%, Hong Kong dollar 0.08%. However, Japanese yen was up 0.23%, China renminbi 0.1%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.155, down 0.10% from its previous close of 98.257.

Published On : 16-09-2019

Source : Live Mint