The recent seven-day winning streak of the Indian rupee came to an end as it depreciated by 4 paise against the US dollar, reaching 83.05 in early trade on Friday. This decline was attributed to foreign investors hastily withdrawing funds amid a significant surge in crude oil prices.
Despite the weakened state of the US dollar and a booming equity market, overall market sentiment was affected by US data revealing a higher-than-expected increase in inflation for December. Forex analysts noted that this development dampened expectations of an imminent interest rate cut by the Federal Reserve. Additionally, investors were keenly awaiting the release of domestic inflation figures later in the day.
At the interbank foreign exchange, the rupee commenced trading weak at 83.08 against the greenback and extended its losses to touch 83.10. Ultimately, it settled at 83.05 against the dollar, reflecting a 4 paise decrease from its previous close. In the preceding session, the domestic currency had concluded 2 paise higher at 83.01. This marked the seventh consecutive session of gains, accumulating a total increase of 31 paise since January 2 when it was recorded at 83.32 versus the dollar.
Simultaneously, the dollar index, measuring the greenback’s strength against a basket of six currencies, experienced a 0.07% decrease, reaching 101.95 on Friday. In the global oil market, Brent crude futures, the benchmark for oil prices, witnessed a notable 1.83% surge, reaching USD 78.83 per barrel.
Within the domestic equity market, the 30-share benchmark Sensex saw a rise of 291.29 points (0.41%) to 72,012.54, while the broader Nifty increased by 79.55 points (0.37%) to 21,726.75. Foreign institutional investors (FIIs) were observed selling shares worth Rs 865.00 crore on Thursday, as per exchange data.
On the macroeconomic front, the income tax department reported a 19.41% increase in net direct tax collection for the fiscal year, totaling Rs 14.70 lakh crore. This achievement represents approximately 81% of the full-year target. As the market continues to navigate through various economic indicators, investors remain watchful of both domestic and international developments impacting the financial landscape.
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