Rupee drops 44 paise to 70.90 against US dollar amid sharp sell-off in equities, strengthening greenback

Mumbai: The rupee depreciated by 44 paise to close at 70.90 against the US dollar Thursday amid a strengthening greenback and sharp decline in equity markets.The dollar and yen rose on safe-haven buying after the arrest of a top executive of Chinese telecom giant Huawei in Canada for suspected Iran sanctions violations renewed concerns over US-China relations.Brent crude, the international benchmark, dropped 2.76 percent to trade at $59.86 per barrel amid a crucial meeting of Opec members.Meanwhile, Saudi Arabia's Oil Minister Khalid al Falih said Opec is looking for a "sufficient" cut in oil production to prop up plunging crude prices.Forex traders said increasing demand for the greenback weighed on the domestic unit, which slipped below the 71 mark during the day.[caption id="attachment_4619341" align="alignleft" width="380"]

Representational image. Reuters.[/caption]After opening lower at 70.82, the rupee plunged to the day's low of 71.14 and finally settled for the day at 70.90, down 44 paise over its previous closing price.On Wednesday, the rupee ticked higher by 3 paise to 70.46 against the US dollar."The US yield curve inverted signalling the possibility of a slowdown ahead for the US economy. Domestically, market participants remain concerned about election outcomes with state elections results due next week."These events were enough for investors to take money off the table and we witnessed a flight to quality as the INR weakened versus the dollar," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.Benchmark equity indices cracked for the third consecutive session Thursday on negative global cues. The BSE Sensex plunged 572.28 points, or 1.59 percent, to close at 35,312.13. Similarly, the broader NSE Nifty fell 181.75 points, or 1.69 percent, to 10,601.15.Foreign portfolio investors (FPIs) net bought shares worth Rs 72.47 crore Thursday, while domestic institutional investors (DIIs) offloaded equities to the tune of Rs 389.78 crore, provisional data showed.The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.0371 and for rupee/euro at 80.5457. The reference rate for rupee/British pound was fixed at 90.2953 and for rupee/100 Japanese yen at 62.99.