Negative Cues From Equities Drag INR Lower; Soft Dollar Cap Sharp Losses

The Indian rupee pared initial gains and settled for the day 5 paise lower at 83.18 (provisional) against the US dollar on Tuesday, amid a negative trend in domestic equities and on dollar demand from importer at lower levels. Weak global cues and anxiety ahead of the general election results, due next week dragged down local equities. Global cues were tepid as tensions escalated in the Middle East and investors awaited a swath of global inflation prints for direction. The Lok Sabha exit poll results will be announced post the completion of all seven phases on June 01. The benchmark S&P BSE Sensex ended the session down 220.05 points, or 0.29 percent, at 75,170.45 while the broader NSE Nifty index slipped 44.30 points, or 0.19 percent, to close at 22,888.15. However, soft dollar overseas capped sharp losses in the local unit. At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.14 and touched an intra-day high of 83.10 and a low of 83.19.

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