Mumbai: The Indian rupee on Wednesday weakened for the fourth consecutive session to hit a fresh five- month low against the US dollar after the country’s trade deficit widened to a 10-month high. A fall in other Asian currencies also dampened the trading sentiment.
The rupee closed at 67.95 a dollar—a level last seen on 28 June, down 0.31% from its previous close of 67.74. The currency opened at 67.71 against the US dollar and touched a low of 67.99—a level last seen on 27 June. So far this year, the Indian has fallen 2.5% against the dollar.
India’s trade deficit widened to $10.16 billion in October against $9.69 billion a year ago due to higher gold imports which jumped 108.4% to $3.5 billion. Export grew 9.59% due to higher exports of gems & jewellery, engineering goods and readymade garments. Imports expanded 8.11%.
India’s benchmark Sensex index closed at 26,298.69 points, down 0.02% or 5.94 points from its previous close. So far this year, it has gained 0.7%.
India’s retail price inflation fell to a 14-month low of 4.2% in October from 4.39% a month-ago period while wholesale price inflation softened to a four-month low of 3.39% in October against 3.57% a month ago.
Bond yield fell in the sixth out of seven trading sessions and hit a fresh seven-and-half year low. The benchmark 10-year government bond yield was trading at 6.445%—a level last seen on 21 May 2009, compared to Tuesday’s close of 6.534%. Bond yields and prices move in opposite directions.
FIIs have sold $441.40 million in debt and bought $6.2 billion in equity till date this year.
Asian currencies closed lower after dollar index extend its rally triggered by Donald Trump’s victory last week in the US presidential election. US retail sales figures were stronger than forecast, while Federal Reserve Bank of Boston president Eric Rosengren said the central bank would tighten monetary policy faster with more fiscal stimulus. The president-elect’s proposals to increase spending and cut taxes are fueling bets economic growth will accelerate and push the Fed to raise interest rates.
Philippines peso was down 0.6%, Japanese yen 0.45%, Singapore dollar 0.39%, China Offshore 0.27%, China renminbi 0.27%, Malaysian ringgit 0.22%, Thai Baht 0.17%. However, Indonesian rupiah was up 0.18%, South Korean won 0.08%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.44 up 0.22% from its previous close of 100.23.