In addition, steady inflows of foreign funds into domestic capital markets have also provided support to local units, foreign exchange traders said.
Release Date – Tuesday 23rd July 07:00
New Delhi: The rupee gained 14 paise to end at 82.03 paise against the dollar on Monday, as the domestic stock market benchmark hit a record high and a weaker dollar abroad boosted investor sentiment.
In addition, steady inflows of foreign funds into domestic capital markets have also provided support to local units, foreign exchange traders said.
“Positive performance in the secondary capital market, especially in the financial sector, with the banking sector up 1.40 per cent, underpinned the appreciation of the rupee.
“Crude oil prices fell 1.65 percent and the weakness also benefited rupee buyers. However, the stability of the dollar index limited the rupee’s appreciation,” said Jateen Trivedi, vice president research analyst at LKP Securities.
In the interbank foreign exchange market, the local unit opened at 82.14 against the dollar, up 14 paise to 82.03 from the previous close.
During the day, the highest point in the domestic stock market was 82.03, and the lowest point was 82.20.
On Friday, the rupee closed at 82.17 against the dollar.
The rupee outperformed Asian currencies on risk-on sentiment and dollar inflows. Falling global commodities and a weaker U.S. dollar index also supported the rupee, said Dilip Parmar, research analyst at HDFC Securities.
Palma added that most Asian currencies were weaker against the dollar after weak Chinese economic data.
Meanwhile, the U.S. dollar index , which measures the greenback’s strength against a basket of six currencies, fell 0.12% to 99.79.
The rupee traded slightly positive amid positive domestic markets and a weaker dollar.
Anuj Choudhary, research analyst at BNP Paribas Sharekhan, said the dollar traded near its weakest level in 15 months as inflation cooled faster than expected and the chances of another Fed rate hike increased.
“We expect the rupee to trade with a slightly positive bias amid rising risk appetite in global markets and a weaker dollar.
“Falling crude oil prices and foreign inflows may also support the rupee. However, concerns over a global economic slowdown may limit its sharp gains. Market participants may remain cautious ahead of retail sales figures due this week’s U.S. and U.K. inflation data Attitude. We expect USD/INR spot trading in the range of 81.60 to 82.50 in the near term,” Choudhary said.
Brent crude futures, the global oil benchmark, fell 1.94% to $78.32 a barrel.
Domestically, the 30-share BSE Sensex closed up 529.03 points, or 0.80 percent, at 66,589.93. The NSE Nifty Composite Index rose 146.95 points, or 0.75 percent, to 19,711.45.
Foreign institutional investors (FIIs) were net buyers in the capital market on Monday, buying shares worth Rs 730 crore, according to exchange data.
FPI inflows into Indian equities remained unabated, with over Rs 3,060 crore invested in the first two weeks of the month, driven by India’s strong economic growth and robust corporate earnings.
Meanwhile, the Reserve Bank of India said on Friday that India’s foreign exchange reserves rose by $1.229 billion to $596.28 billion in the week ended July 7.
Last week, foreign exchange reserves totaled US$595.05 billion, an increase of US$1.85 billion.
