A fresh demand for the US currency from importers weighed on rupee.
Rupee is under pressure against the dollar on weak cues.
Overseas funds have also become strong buyers of debt, with net purchases of $5.6 billion so far this year.
Waves of foreign portfolio investments worth over Rs 51,000 crore splashed into the Indian market in 2021 as overseas investors turned net buyers of domestic securities for the third straight year while excess global liquidity and other factors steered the ebb and flow of their investing ways. With the global financial system still flush with liquidity, emerging market assets, especially equities, might well remain the preferred investment avenue for many more months to come, experts opined. As the equities sizzled during most of 2021, that also saw economy slowly coming back into the recovery path, Foreign Portfolio Investors (FPIs) turned net buyers but their investment is much less compared to net inflows of Rs 1.03 lakh crore in 2020.
India spends significantly less on defence than could be expected from a country that faces simultaneous armed threats from two hostile neighbours -- China and Pakistan.
The US dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was sharply higher by 0.62 per cent at 93.96.
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In the global market, the dollar was quoted lower in the early trade with investors looking ahead to the following day's European Central Bank policy decision.
The rupee has declined by 24 paise in four days of losses.
The rupee edged higher by three paise to 66.46 against the US dollar in early trade on Wednesday.
Actively managed debt funds with the flexibility to go long on duration made a strong comeback on the returns chart in 2023, thanks to softening bond yields. The average one-year returns of floater, long-duration, gilt, and dynamic bond funds, which ranged between 2.3 per cent and 4.5 per cent at the end of 2022, now stand at over 7.2 per cent, with some schemes delivering over 8.5 per cent, according to data from Value Research. Debt fund returns are inversely related to yields of underlying investments, meaning a decline in yields is positive for funds.
HCL Tech was the biggest loser on the Sensex chart, shedding 2.79 per cent, followed by Tata Steel, ICICI Bank, Reliance Industries, ITC, Wipro, Infosys and M&M. In contrast, Tata Motors, L&T, Bharti Airtel, HDFC Bank and SBI were among the winners, climbing up to 2.05 per cent.
At the Interbank Foreign Exchange market, the domestic unit commenced higher at 61.80 a dollar from previous close of 61.92.
The rupee had shed 9 paise to end at 64.13 on Friday.
Foreign Portfolio Investors' (FPIs) selling spree continues as they pulled out over Rs 3,400 crore from the Indian equity markets in the first three trading sessions of November on rising interest rates and geopolitical tensions in the Middle East. This came after such investors withdrew Rs 24,548 crore in October and Rs 14,767 crore in September, data with the depositories showed. Before the outflow, FPIs were incessantly buying Indian equities in the last six months from March to August and brought in Rs 1.74 lakh crore during the period.
The rupee ended lower by six paise at 65.73 against the US dollar on Monday.
The rupee on Tuesday recovered from its two-week low to end steady at 66.60 against the American currency, inching up by a paisa on the back of mild dollar selling.
The rupee had lost 21 paise on Tuesday's trade.
The US dollar index, which measures greenback's strength against a trade-weighted basket of six major currencies, was up 0.14 per cent at 96.74.
The rupee had snapped its 3-day losing streak on Thursday.
IndusInd Bank was the biggest gainer on the Sensex chart, rising 4.75 per cent, followed by M&M, L&T, NTPC, ITC, Ultra Cement, Tata Steel, Maruti and SBI. In contrast, Bajaj Finance, Tech Mahindra, Infosys and Sun Pharma were among the losers, shedding up to 2.30 per cent.
Forex dealers said apart from month-end demand for the American currency from importers, dollar's gains against other currencies overseas amid US data showing more-than-expected economic growth in the second quarter also put pressure on the local unit.
The local currency had gained 10 paise to close at 63.51.
Forex dealers said besides robust month-end demand for the American currency from oil importers, dollar's strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions, weighed on the domestic currency.
The rupee weakened even as the dollar fell against major global currencies
The US dollar turned expensive against a basket of global currencies which hit the rupee sentiment
On Monday, the rupee gained 16 paise.
Increased demand for the dollar weighed on the local currency.
Month-end dollar demand affected the rupee
The US economy has been growing comfortably for several quarters.
The Rupee is seen weakening further against the dollar.
The broader Nifty also succumbed to the pressure before recovering to close lower by 6.35 points, or 0.07 per cent at 8,693.05
A higher opening in the domestic equity market influenced uptrend.
Extending losses for the second straight session, the rupee slipped by 11 paise at 66.54 against the US dollar.
The rupee on Monday plunged to a two-week low of 66.61 by falling 47 paise against the US dollar on heavy demand for the American currency from importers.
Dealers attributed the rupee's fall to fresh demand for USD.
'Some risks to this market rally include inflation, erratic weather conditions, rising crude prices, slowing global growth and the resultant impact on domestic exports, escalation in geopolitical tensions.'
The currency market won't care for our moans, groans, cries and sighs. The rupee will find its own level, explains Tamal Bandyopadhyay.
Forex dealers said dollar's weakness against other currencies overseas supported the rupee.
A massive outflows of foreign funds on the back of stricter participatory notes and renewed possibility of Fed lifting US interest rates largely impacted the domestic unit.
IT stocks attracted robust demand on Monday, rising by as much as over 2 per cent, on hopes that the rupee's weakness will boost dollar revenues of the software firms.
