In a show of resilience, the Indian rupee surged 6 paise to settle at 82.95 (provisional) against the US dollar on Tuesday, propelled by robust sentiment in the equity markets and a weakened American currency. Despite sustained outflows of foreign funds, the domestic currency managed to make significant gains, reflecting positive market dynamics.
At the interbank foreign exchange market, the rupee commenced trading at 83.02 and reached an intraday high of 82.91 against the greenback. Ultimately, the rupee closed at 82.95 (provisional) against the dollar, marking a notable increase of 6 paise from its previous closing value.
Forex traders attributed the rupee’s ascent to the weakening of the dollar index, which measures the greenback’s performance against a basket of six major currencies. Additionally, a slight correction in crude oil prices following a period of strong growth lent further support to the rupee. The financial sector’s upward trajectory, exemplified by a 1.25 percent surge in the Bank Nifty index, attracted inflows of funds, bolstering the rupee’s position.
Jateen Trivedi, VP Research Analyst at LKP Securities, commented on the factors influencing the rupee’s performance, stating, “Rupee strengthened as the dollar index weakened. Additionally, a minor correction in crude prices after a strong rally provided support to the rupee. The financial sector’s uptrend, evidenced by a 1.25 percent gain in the Bank Nifty index, attracted fund inflows, further bolstering the rupee.”
The dollar index recorded a decline of 0.10 percent, settling at 104.07. Meanwhile, Brent crude futures, the global oil benchmark, experienced a 0.59 percent decrease, reaching USD 83.07 per barrel.
On the domestic front, the Indian equity market exhibited positive momentum, with the Sensex climbing 349.24 points, or 0.48 percent, to close at 73,057.40 points. The Nifty also saw gains, rising by 74.70 points, or 0.34 percent, to reach 22,196.95 points.
However, despite the overall optimistic market sentiment, Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth Rs 754.59 crore, according to exchange data.
The strengthening of the rupee against the US dollar reflects India’s resilience amidst global economic fluctuations, offering a glimmer of hope for sustained stability and growth in the coming days.
