Rupee tumbles 40 paise to 72.06 against US dollar in early trade

The rupee on Monday slipped to 72.06 in the opening deals on Monday amid weak global cues. The domestic unit on Friday ended at 71.66, up 15 paise on hopes that the government will roll back the FPI surcharge and unveil measures to boost growth. It had breached the 72-mark for the first time in 2019 during the intra-day trade on Friday. 

The Indian currency has witnessed heavy selling in the recent past, and has been depreciating against the dollar for the last seven consecutive weeks. There could be a pullback in the rupee as it looks extremely oversold in the short term, said VK Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.

FPIs, which have been net sellers for the past many weeks, offloaded shares worth Rs 902.99 crore on Thursday, provisional data with the exchanges showed. So far this month, overseas investors have pulled out a net amount of Rs 3,014 crore from the Indian capital markets, but the trend may reverse following the removal of enhanced surcharge on FPIs, experts said. 

On the global front, Asian shares sank on Monday as the latest salvo in the Sino-US trade war shook confidence in the world economy and sent investors steaming to the safe harbours of sovereign bonds and gold, while slugging emerging market currencies. China’s yuan hit an 11-year low in onshore trade and tumbled to a record low in offshore trade, Reuters reported. 

In the commodity market, Brent crude futures slid 68 cents to $58.66, while U.S. crude lost 79 cents to $53.38 a barrel.