Rupee Falls 7 Paise to 83.10 vs US Dollar - Oil Spike, Weak Markets

Mumbai, Dec 18 (PTI) The rupee surrendered its initial gains to settle 7 paise lower at 83.10 against the US dollar on Monday due to a spike in oil prices and a lacklustre trend in domestic equity markets.

However, a weak greenback against major currencies overseas supported the local currency, forex traders said.

At the interbank foreign exchange market, the local unit opened strong at 82.97 against the greenback and traded in a range of 82.90-83.10. It finally settled at the day's low of 83.10, a decline of 7 paise over its previous close.

On Friday, the domestic currency settled at 83.03 against the dollar.

"The minor weakness observed in capital markets and profit booking after a rapid rally from 83.30 to 82.90 contributed to this downward movement.

"Despite this, the short-term trend for the rupee looks positive, with the dollar index showing broad weakness and a positive money flow into Indian capital markets. The anticipated rupee range is between 82.75 and 83.25," Jateen Trivedi, VP Research Analyst at LKP Securities, said.

Brent crude rose by 3.59 per cent to USD 79.30 per barrel due to concerns over attacks by the Iranian-backed Houthis on container ships and oil tankers. British major BP joined the list of companies that have halted shipments through the Red Sea.

Ships will have to go around the Cape of Good Hope at the bottom of Africa instead, adding days to voyages as well as cost.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10 per cent lower at 102.07.

In the domestic equity market, the 30-share BSE Sensex settled 168.66 points or 0.24 per cent lower at 71,315.09. The broader NSE Nifty fell 38 points or 0.18 per cent at 21,418.65.

Foreign institutional investors (FIIs) were net sellers in the equity market on Monday despite hectic activity. FIIS bought shares worth Rs 11,473.54 crore and sold equities worth Rs 11,507.05 crore, leading to a net outflow Rs 33.51 crore, according to exchange data.