Finance
The rupee on Thursday settled flat at 82.91 (provisional) against the US dollar, as the support from lower crude oil prices and a weak greenback against major crosses overseas was offset by sustained foreign capital outflows.
Additionally, favorable equities market trends cushioned the domestic unit, according to forex dealers.
They said that market players exercised caution in advance of the announcement of the domestic GDP figures later in the day.
The local currency opened at 82.88 on the interbank foreign exchange market and fell as low as 82.94 over the day. The local currency eventually settled at the closing level of 82.91 (provisional) against the dollar from the previous day.
The rupee ended the day on Wednesday 2 paise weaker than the US dollar, at 82.91.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.19 per cent to 103.78.
Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas, said the Indian rupee was under pressure due to selling by foreign institutional investors and dollar demand from importers. However, positive domestic markets and a weak US dollar cushioned the downside.
He said the US dollar declined as the US GDP growth estimate edged lower while other macroeconomic data were also disappointing.
“We expect the rupee to trade with a slight negative bias on dollar demand from OMCs (oil marketing companies) and importers. However, a weak dollar and positive domestic as well as European markets may support the rupee at lower levels. Traders may take cues from India’s fiscal deficit and GDP data,” he said, adding that “USD-INR spot price is expected to trade in a range of Rs 82.70 to Rs 83.15”.
The benchmark for global oil, Brent crude futures, fell 0.17 percent to USD 83.54 a barrel.
The Sensex increased by 195.42 points, or 0.27 percent, to close at 72,500.30 points on the domestic equities market. The Nifty closed at 21,982.80 points, up 31.65 points, or 0.14 percent.
According to exchange data, foreign institutional investors (FIIs) sold shares worth Rs 1,879.23 crore on a net basis on Wednesday, making them net sellers in the capital markets.
Source:FE
