Mumbai, Jul 14 (PTI) The rupee on Tuesday tumbled by 23 paise to settle at 75.42 against the US dollar as risk appetite remained weak amid heavy selling in domestic equities and strengthening American currency.

Forex traders said steady crude oil prices supported the rupee, but risk appetite remained weak amid rising tensions between the US and China.

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The rupee opened lower at 75.33 at the interbank forex market and lost ground to touch a low of 75.49 against the US dollar.

The local unit settled at 75.42 against US dollar, down 23 paise from its last close of 75.19.

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Besides, investor sentiment weakened after India's June Consumer Price Index (CPI) breached Reserve Bank of India's tolerance band of 6 per cent, traders said adding that factors like strong dollar, negative domestic equities and rising COVID-19 cases dragged the local unit down.

Equity benchmarks Sensex and Nifty plunged over 1.8 per cent, the biggest single-day decline in nearly five weeks, mirroring massive global selloffs amid simmering US-China tensions.

BSE Sensex ended 660.63 points or 1.80 per cent lower at 36,033.06 while the NSE Nifty closed 195.35 points or 1.81 per cent down at 10,607.35.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 221.76 crore on Monday, according to provisional exchange data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17 per cent to 97.62.

Brent crude futures, the global oil benchmark, fell 1.26 per cent to USD 42.18 per barrel.

Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.31 crore and the death toll has topped 5.73 lakh.

In India, the death toll due the disease rose to 23,727 and the number of infections crossed 9-lakh mark, according to the health ministry.

Jateen Trivedi, Senior Research Analyst at LKP Securities said, "Rupee traded weak on the back of FII's fund outflows from local stock seen as a fresh selling pressure on rupee".

"Crude prices traded soft hence some support was witnessed near 75.50 zone. More or less prices look in range of 74.70-75.75 in coming sessions".

According to Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, the rupee came under pressure against the US dollar after inflation in India rose to 6.09 per cent in June compared to a rise of 5.84 per cent in the month of March following increases for some food and fuel items.

Food inflation in June increased by 7.87 per cent, according to Consumer Price Index (CPI) data.

Meanwhile, "global equities witnessed selling pressure on expectation of escalating tension between the US and China".

US Secretary of State Mike Pompeo on Monday categorically rejected the territorial claims made by Beijing in the South China Sea and said that the "Chinese predatory world view" has no place in the 21st century.

Meanwhile, China on Tuesday announced sanctions on top American arms manufacturing firm Lockheed Martin over Taiwan missile deal.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.1567 and for rupee/euro at 85.1220. The reference rate for rupee/British pound was fixed at 95.1168 and for rupee/100 Japanese yen at 70.30.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)