Dollar closed at 68.0900 against its opening at 67.6800. Dollar surged to near 16-month high Tuesday as local stock indices dropped owing to selling by both local and overseas investors on report Congress-JDS combine may form government in Karnataka. However, the upside was capped on intervention by the Reserve Bank of India. Congress-JD tie-up lead to FII and domestic investors to sell off from stocks, leading to fall of rupee. The Indian National Congress (INC) reached out to Janata Dal (JD) to form a coalition government in Karnataka, by offering CM post to JD. According to the recent leads, the Election Commission of India website, out of the 224 seats BJP has taken a lead in 105 seats, just three seats short of a simple majority. Meanwhile, the Congress is leading in 55 seats and the JD(S) in 37.

The greenback surged against its major currencies as investors look forward to the release of retail sales, homebuilder confidence, and the New York manufacturing index.  

BSE Sensex closed 12.77 points lower at 35,543.94, while the Nifty 50 ended 4.75 points down.

INTERNATIONAL

Asian stocks pulled back, brushing off a firmer Wall Street lead and pausing a recent rally, as investors remained cautious about key economic and political risks, while supply concerns kept crude oil prices near 3-1/2-year highs.
 

Gold prices fell on Tuesday while the dollar also dropped slightly against the other major currencies.

Oil prices remained near multi-year highs on Tuesday morning in Asia amid looming U.S. sanctions against Iran.

China reported weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the United States.

Bitcoin prices advanced , despite reports that South Korea’s government is widening its probe on local crypto exchanges.