Rupee weakens against US dollar over muted market sentiment

The Indian rupee weakened marginally against the US dollar on Wednesday amid continued selling by foreign investors and weak global cues. The rupee opened at 71.5338 per dollar, down 5 paise from its previous close of 71.4850. Intraday, the home currency hit a high of 71.4650 and a low of 71.6338 against the dollar. At 11:05 AM, the Indian rupee was trading 0.2 percent lower at 71.6225 per dollar.

The Indian rupee on Tuesday jumped by 54 paise, its biggest single-day gain in more than five months, to close at a one-week high of 71.48 against the US dollar, boosted by positive sentiment over the fiscal situation.

Yields on the 10-year government bonds stood at 6.5255 percent , marginally lower from the previous close of 6.5285 percent. Bond prices and yields move in the opposite direction.

Subdued sentiment in local and global markets have also weakened the rupee. Benchmark indices BSE Sensex and NSE's Nifty 50 were trading 0.2 percent lower dragged by metal and financial stocks.

Asian shares turned cautious today after an overnight US selloff over deeper worries about the global economy and trade. Meanwhile, crude oil prices advanced for the second day after an industry report showed US stockpiles fell more than expected.

Along with the rupee, most Asian currencies like South Korean won, Thai Baht, Malaysian ringgit, Japanese yen and Indonesian rupiah were trading lower against the US dollar, said traders.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.08 percent up at 98.07.

On Tuesday, foreign institutional investors (FIIs) pulled out Rs 923.94 crore on net basis, according to provisional NSE data.