Geopolitical risks arising from Iran-Israel conflict, rising crude oil prices and foreign fund outflows impacted the Rupee and Government Securities (G-Secs) on Thursday.

The rupee weakened to close 15 paise lower at 83.9675 per US Dollar vis-a-vis the previous close of 83.82. This is the rupee’s biggest single day decline in nearly two months against the dollar.

“The USDINR traded within the 83.90 to 84 range today, with a downside bias. This movement was influenced by global factors, particularly escalating tensions in the Middle East after Iran launched missiles at Israel, which has fueled concerns of further conflict. As a result, both the Dollar Index and oil prices saw a surge.”

He observed that domestically, despite a sharp 2 per cent drop in the stock market due to global instability, the Rupee remained relatively stable.

Pabari opined that the USDINR is expected to face a strong resistance around 84 to 84.10 levels, as the RBI is reportedly intervening on the sell side to limit the downside.

Yields of G-Secs rose tracking hardening US treasury yields, which were impacted by rising crude oil prices and US dock workers strike. Brent crude climbed 1.37 per cent to $74.91 a barrel.

Nuvama Wealth Management noted that the 10 year benchmark (7.10 G-Sec 2034) opened mildly higher tracking a rise in treasury yields overnight (over Tuesday) following a sharp rise in crude oil prices.

“Yields traded with an upward bias on the day, with markets watching evolving geopolitical tensions. The 10 year (7.10 GS 2034) closed trade at 6.78 per cent vs previous close of 6.75 per cent,” it said. In absolute terms, this paper closed at ₹102.24, down about 20 paise vs previous close.