Adversitement
Indian Rupee Edges Higher Against US Dollar Amid Positive Equity Sentiment
Published On : 2024-03-04T18:22:06+0530 [ IST ] |
Author : Mayur_Tembhare
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On Monday, the Indian rupee appreciated by 2 paise against the US dollar, closing at 82.89 (provisional). This uptick was attributed to a weaker US dollar and optimistic sentiment in the domestic equity markets. However, concerns lingered over volatile crude oil prices and foreign fund outflows, which exerted pressure on the currency.
The local unit opened at 82.86 in the interbank foreign exchange market and maintained a narrow range throughout the day, touching a low of 82.91 before settling at 82.89. Despite its initial gains, reports of dollar buying by public sector banks tempered the rupee's upward momentum.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, noted that the rupee's initial gains were driven by a weak dollar and positive domestic market sentiment. However, dollar buying by public sector banks led to the currency relinquishing some of its gains. Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, remained unchanged at 103.79.
Choudhary further highlighted that the US dollar's decline was spurred by disappointing economic data from the US and favorable global equities. He anticipated the rupee to trade with a slight positive bias within a narrow range, supported by increased risk appetite in global markets and weakness in the greenback. Nevertheless, the surge in crude oil prices and potential dollar buying by PSU banks or the Reserve Bank of India (RBI) could dampen the rupee's upward trajectory.
In the equity markets, the Sensex surged by 66.14 points, settling at a new peak of 73,872.29, while the Nifty rose by 27.20 points to close at a record 22,405.60. Additionally, India's forex reserves witnessed a notable increase of USD 2.975 billion to reach USD 619.072 billion for the week ended February 23, as reported by the Reserve Bank.
Furthermore, a monthly survey revealed that India's manufacturing sector growth reached a five-month high in February, driven by increased factory production and sales supported by domestic and external demand. However, foreign investors" target="_blank">institutional investors (FIIs) remained net sellers in the capital markets, offloading shares worth Rs 81.87 crore, according to exchange data.
Source : MoneyControl
Tags : Sensex , equity markets , Indian rupee , crude oil prices , US dollar , foreign fund outflows , forex market ,
Summary : The Indian rupee gained 2 paise against the US dollar, settling at 82.89 (provisional) on Monday, buoyed by a weaker dollar and positive sentiment in the domestic equity markets. However, concerns over volatile crude oil prices and foreign fund outflows limited the currency's gains.
Adversitement