Rupee slips 12 paise to 77.74 against US dollar in early trade

Mumbai: The rupee extended its losses and slipped 12 paise to 77.74 against the US dollar in early trade on Thursday, weighed down by a muted trend in domestic equities and unabated foreign fund outflows.

At the interbank foreign exchange, the rupee opened at 77.72 against the American dollar, then lost ground to quote at 77.74, registering a fall of 12 paise from the last close.

On Wednesday, the rupee declined by 1?7 paise to close at its fresh lifetime low of 77.6?1 against the US dollar.

The rupee opened weaker against the US dollar on Thursday as global equities plunged on concerns that high inflation and monetary policy tightening will fuel an economic slowdown, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Iyer further said inflation will remain the biggest strain on sentiment, both globally and locally. Additionally, foreign equity outflows will keep appreciating bias limited.

Foreign institutional investors were net sellers in the capital market on Wednesday, as they offloaded shares worth Rs 1,254.64 crore, as per stock exchange data.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.15 per cent lower at 103.65, tracking rising US yields and fears about higher interest rates.

The US dollar eased slightly on Thursday morning in Asian trade, however, downside could be capped as poor US housing data may add to slowdown concerns.

On the domestic equity market front, the 30-share Sensex was trading 936.86 points or 1.73 per cent lower at 53,271.67, while the broader NSE Nifty declined 284.80 points or 1.75 per cent to 15,955.50.

Global oil benchmark Brent crude futures rose 1.37 per cent to USD 110.61 per barrel.