Fresh inflows of foreign funds helped to uplift the mood in the market and thus on the basis of this the Indian rupee rose by 17 paise on Thursday to close at a provisional 90.61 against the U.S dollar. It was a positive end to the trading day as the domestic currency was stronger than before and this was a sign that the investor was more confident with the global signals of the world.
The fact that foreign institutional investors (FIIs) continued to buy equity markets was the major reason behind the appreciation of the rupee as explained by forex traders. The exchange data showed that on Wednesday, the domestic equities purchased by the FIIs reached ₹943.81 crore, which portrayed positive prospects in the currency market.
The dollar index, which indicates the performance of the U.S. dollar against a basket of 6 major world currencies, was slightly lower by 0.04% at 96.79. The minor decline of the dollar index also gave a boost to the emerging market currencies such as the rupee.
Brent crude oil futures being the world market were trading at 0.29% below at $69.20 per barrel. Lower crude prices are usually perceived to have a positive effect on India which is a top oil importer because it will mitigate the inflationary impact and current account deficit concerns.
Nevertheless, the domestic equity markets were trading negatively at the end of the day. The BSE Sensex was down by a great margin of 558.72 to close at 83, 674.92 and the NSE Nifty was down by 146.65 to close at 25,807.20. Although the equities were weak, the inflows of foreign capital and the weakening of the dollar enabled the rupee to record profits within the session.
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