However, selling pressure from foreign institutional investors may weigh on the rupee at higher levels
The rupee appreciated 15 paise to close at 81.91 (provisional) against the US dollar on Monday as a firm trend in domestic equities and easing crude oil price boosted investor sentiments.
However, selling pressure from foreign institutional investors may weigh on the rupee at higher levels. At the interbank foreign exchange market, the local unit opened at 82.08 against the US currency and finally closed at 81.91 (provisional) against the greenback, registering a gain of 15 paise over its previous close.
During the session, the rupee touched a high of 81.88 and a low of 82.09 against the dollar. The rupee on Friday settled at 82.06 against the US dollar. The rupee appreciated on Monday on strong domestic equities and a soft US dollar. Weak trend in crude oil price also supported the rupee.
However, FII outflows capped sharp gains, Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas – said. ”We expect the rupee to trade with a positive tone on easing global crude oil price and positive domestic equities. Dollar may continue to remain weak as overall economic data continues to remain largely weak, leading to increasing concerns over recession,” Choudhary said.
According to him, selling pressure from FIIs may also weigh on the rupee at higher levels, Choudhary added. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.17 per cent to 101.64. Global oil benchmark Brent crude futures declined 0.29 per cent to USD 81.42 per barrel.
On the domestic equity market front, the 30-share BSE Sensex advanced 401.04 points or 0.67 per cent to end at 60,056.10 points, and the broader NSE Nifty gained 119.35 points or 0.68 per cent to 17,743.40 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they offloaded shares worth Rs 2,116.76 crore, as per exchange data. Meanwhile, India’s forex reserves rose USD 1.657 billion to USD 586.412 billion as of April 14, according to Reserve Bank of India data released on Friday.