Rupee opens higher at 75.78 per dollar

Indian rupee opened 13 paise higher at 75.78 per dollar on Tuesday against previous close of 75.91, amid buying seen in the domestic equity market.

Indian rupee ended 34 paise lower at 75.91 per dollar on May 18, amid selling seen in the domestic equity market.

At 10:03 IST, the Sensex was up 509.34 points or 1.70% at 30538.32, and the Nifty was up 148.05 points or 1.68% at 8971.30.

"The rupee is under pressure as the market is disappointed over the stimulus package announced by the government. Weakness in the domestic equities market has pressurized the rupee. Performance of India's key macroeconomic data has deteriorated significantly, said Rushabh Maru - Research Analyst , Anand Rathi Shares and Stock Brokers.

"On the other hand, global financial markets have turned volatile due to growing possibility of second wave of the coronavirus. The tension is rising between the US and China as the later failed to contain the pandemic. This might put pressure on the yuan. Hence the rupee may remain under pressure in the near term," he added.

Oil prices rose on Tuesday, extending gains for a fourth straight session, amid signs that producers are cutting output as promised just as demand picks up, stoked by more countries easing out of curbs imposed to counter the coronavirus pandemic.

The dollar nursed losses against major currencies on Tuesday after encouraging data from the trial of a vaccine for COVID-19 reduced safe-haven demand for the greenback.

"After a brief retracement wherein it inched higher towards 75.05 mark, the Indian rupee has again steered towards depreciating path, in line with its overarching trend. The strength in US dollar and weakness in domestic equities along with concerns about widening of the fiscal deficit, due to the recent stimulus package paved the way for decline in the domestic currency," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

"Market participants are also concerned about the rising covid-19 cases in India and its impact on the economy. Rise in gold and crude prices further acted as headwind for the rupee."

"Going ahead, the trend remains skewed to the downside as risk sentiment will further worsen in case it closes beyond the 76 mark, which will then drive it lower towards 76.50 levels," she added.