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Rupee sheds early gains; closes marginally lower at 65.04

Mumbai, Oct 18 (PTI) Paring early gains, the rupee today ended marginally lower by 2 paise at 65.04 against the US dollar in a highly volatile trade session.

Sustained interest in buying dollar from banks as well as importers and pullout of capital by overseas funds weighed on the rupee after it touched the 64-mark briefly in early trade.

Retreating during the day, the rupee finally closed at 65.04 against the dollar amid the overall sentiment in the forex market remaining shaky as concerns over geopolitical situation persisted.

Besides, dealers seemed to be cautious as they kept away from taking long positions ahead of a long holiday weekend.

At the Interbank Foreign Exchange (FOREX) market, the rupee resumed higher at 64.95 from Tuesday's closing level of 65.02 on fresh bouts of dollar selling by exporters and gained further to 64.93.

However, the initial recovery momentum was short lived as the currency markets witnessed a sudden spike in volatility.

The rupee retreated sharply to hit a fresh intra-day low of 65.16 in afternoon deals. It managed to recoup some of the losses towards the fag-end to settle at 65.04, showing a nominal fall of 2 paise.

The rupee had lost 28 paise yesterday.

The RBI, meanwhile, fixed the reference rate for the dollar at 65.0649 and for the euro at 76.5423.

The dollar index, which measures the greenback's value against a basket of six major currencies, was trading firmly higher at 93.46 in early trade.

In cross-currency trades, the rupee edged higher against the Pound Sterling to finish at 85.68 from 85.79 per pound and inched up against the Euro to end at 76.43 from 76.44 yesterday.

The rupee recovered sharply against the Japanese yen to close at 57.70 per 100 yens compared to 57.94 earlier.

The dollar continued to maintain the lead even as speculations over impending rate hike by the US Federal Reserve continued.

The forex and money markets would be closed on Thursday and Friday for Diwali.

Domestic equity markets ended the last trading session of Samvat 2073 on a subdued note as panic wave of selling in financial stocks overshadowed investor sentiments. Also, disappointing numbers from Axis Bank re-ignited uncertainties about provisioning for loan defaults.

The flagship Sensex dropped 24.81 points to 32,584.35, while Nifty retreated from overnight historic peak to settle lower by 23.60 points at 10,210.85. PTI EDM BPD RAM MKJ

Disclaimer: This story has not been edited by BW staff and is auto-generated from a syndicated feed.

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