Experts say fall in crude oil and commodity prices and expectations of foreign fund inflows from LIC IPO supported the rupee.
Experts say fall in crude oil and commodity prices and expectations of foreign fund inflows from LIC IPO supported the rupee.
The rupee on Tuesday advanced 4 paise to 76.60 against the US dollar following a rebound in regional currencies and domestic equities.
However, amid fears about the economic impact of China’s COVID-19 lockdown and aggressive pace of hike in US rates, the appreciation bias in the local unit will be capped in the near term, traders said.
At the interbank forex market, the rupee opened at 76.48 against the greenback and moved in a range of 76.43 to 76.69 in the day’s trade. The rupee traded at 76.60 at 3.30 pm, which was 4 paise higher than its previous close of 76.64.
Research analyst Dilip Parmar said, “Indian rupee rose after two days of sharp selloff in regional currencies and domestic equities. Fall in crude oil and commodity prices and expectations of foreign fund inflows from LIC IPO supported the rupee. ” , HDFC Securities.
However, the local unit is still not out of the woods as a strengthening dollar against major currencies, weak economic growth, high inflation are likely to limit gains.
“Broadly speaking, spot USDINR is expected to trade in the range of 76 to 77, while near term directions will be followed by risky mood and movement in Chinese Yuan,” Mr. Parmar said.
On the domestic equity market front, the BSE Sensex closed 776.72 points or 1.37% higher at 57,356.61, while the broader NSE Nifty jumped 246.85 points or 1.46% to end at 17,200.80.
Global oil benchmark Brent crude futures fell 0.49% to $101.82 a barrel.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.06% to 101.81.
Foreign institutional investors were net sellers in the capital markets on Monday as they sold shares worth Rs 3,302.85 crore, according to stock exchange data.