Mumbai: The Indian rupee weakened against the US dollar on Wednesday, tracking subdued domestic equities and other Asian currencies.

Rupee closed at 71.07 a dollar, down 0.07%, from Monday's close of 71.03. The Indian unit had opened at 71.19 a dollar. On Tuesday, markets were shut due to Dussehra.

Domestic equities have been weak recently, having declined for six sessions and losing 4% during the period, ahead of July-September quarterly earnings that start this week. The market widely expects quarterly corporate earnings to be weak.

The benchmark Sensex gained 1.72% or 645.97 points to close at 38177.95. So far this year, the index has gained 5.85%.

The yield on the 10-year Indian government bond was at 6.453% compared with its previous close of 6.675%. Bond yield and prices moves in opposite directions.

In the year so far, the rupee has weakened 1.83%, while foreign investors have bought nearly $7.66 billion in Indian equities and $3.99 billion in debt during the period.

Most Asian currencies declined after tension between US and China escalated ahead of Chinese Vice Premier Liu He leading a delegation for two days of talks in Washington beginning Thursday. The White House has slapped visa restrictions on Chinese officials, citing the mistreatment of Uighur Muslims in China.

The South Korean won was down 0.387%, Japanese yen 0.270%, Malaysian ringgit 0.107%, Indonesian rupiah 0.078%, Taiwan dollar 0.058%, Philippines peso 0.033%. However, China Offshore advanced 0.421%, China Renminbi 0.275%, Thai Baht was up 0.204% and Singapore Dollar 0.167%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 99.044, down 0.09% from its previous close of 99.133.

Bloomberg contributed this story

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