Mumbai, Jan 4 – The Indian rupee gained 7 paise to close at 83.23 against the US dollar on Thursday, driven by a positive trend in domestic equities and the weakness of the American currency in the global market. However, the surge was curbed by the rise in crude oil prices, according to forex traders.
In the interbank foreign exchange market, the rupee started flat at 83.30 against the greenback. Throughout the day, it fluctuated between an intra-day low of 83.32 and a high of 83.21 against the dollar, finally settling at 83.23, marking a 7-paise increase from its previous close.
This marks the rupee’s second consecutive day of gains, influenced by a weaker US dollar following mixed signals from the Federal Open Market Committee (FOMC) meeting minutes. The euro’s rise against the US dollar, driven by better-than-expected service PMI numbers, also contributed to the rupee’s appreciation, along with other Asian currencies after Eurozone data.
However, the rupee’s afternoon gains were trimmed due to higher crude oil prices and increased demand for dollars from importers, explained Dilip Parmar, Research Analyst at HDFC Securities. He added that the spot USD/INR is expected to consolidate between 83.10 and 83.50.
Meanwhile, the dollar index, measuring the greenback’s strength against a basket of six currencies, was trading 0.32% lower at 102.16. Brent crude futures, the global oil benchmark, rose by 1.05% to USD 79.07 per barrel.
On the domestic equity market front, the Sensex surged by 490.97 points (0.69%) to settle at 71,847.57 points, and the Nifty advanced by 141.25 points (0.66%) to 21,658.60 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, selling shares worth Rs 666.34 crore, according to exchange data.
Regarding the domestic macroeconomic scenario, India’s manufacturing sector growth fell to an 18-month low in December, showing a softer increase in factory orders and output despite minimal inflation, as per the HSBC India Manufacturing PMI survey conducted by S&P Global. The survey also indicated a strengthening of business confidence towards the year-ahead outlook.
