Symbolic picture only. , Photo credit: The Hindu
The rupee appreciated by 11 paise to 82.20 against the US dollar in early trade on May 16, supported by steady inflows of foreign funds.
Forex traders said a weak trend in domestic equities and strength of the American currency overseas weighed on investor sentiment.
At the interbank foreign exchange, the domestic unit opened at 82.22 against the dollar and then recovered to 82.20, registering a gain of 11 paise over its previous close. On Monday, the rupee had closed at 82.31 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.06% to 102.37. Global oil benchmark Brent crude futures fell 0.51% to $75.61 a barrel.
Amit Pabri, MD, CR Forex Advisors, said, “Going forward, rising oil prices may remain a concern for the local entity as the US has started replenishing its strategic reserves and the SPR is set for three months.” Confirmed to buy up to 1 million barrels of oil.
“Rise in US Dollar and Oil, and weakening EM peer currencies create clear room for USD-INR pair to move above 82.50 – 82.80 levels in next 15-20 sessions,” said Mr. Pabri.
Foreign institutional investors (FIIs) were net buyers in the capital market on Monday as they bought shares worth Rs 1,685.29 crore, according to exchange data.
In the domestic equity market, the 30-share BSE Sensex closed 19.76 points or 0.03% lower at 62,325.95. The broader NSE Nifty fell 1.55 points, or 0.01%, to 18,397.30.
Meanwhile, India’s exports contracted 12.7% in April for the third consecutive month to $34.66 billion, while the trade deficit narrowed to a 20-month low of $15.24 billion, government data showed on May 15.