The Indian rupee saw a 2 paise uptick to 82.89 against the US dollar in early Monday trade, propelled by foreign fund inflows and declining crude oil prices globally. Forex analysts noted a cautious investor stance due to subdued equity market sentiment, coupled with the strength of the US dollar. The week ahead promises crucial macroeconomic data releases on inflation in both India and the US.
Opening at 82.88 against the greenback, the rupee’s marginal gain of 2 paise from the previous close is attributed to foreign investment influx. However, the subdued sentiment in the equity market and the dollar’s firmness posed challenges for the domestic unit. In the preceding session, the rupee had closed 6 paise lower at 82.91 against the US dollar.
The dollar index, measuring the dollar against a basket of six major currencies, observed a slight uptick of 0.06%, reaching 103.92. Meanwhile, Brent crude futures, the global oil benchmark, experienced a 0.45% dip, trading at USD 82.25 per barrel, contributing to the positive momentum for the rupee.
On the domestic front, the BSE Sensex, a key indicator of the Indian stock market, witnessed a decline of 219.37 points or 0.30%, settling at 72,923.43 points. The broader NSE Nifty also experienced a dip, losing 51.10 points or 0.23%, closing at 22,161.60 points.
Foreign Institutional Investors (FIIs) exhibited positive sentiment on Friday, netting buyers in the capital markets with purchases totaling Rs 1,276.09 crore, according to exchange data. The inflow of foreign funds has been a contributing factor to the rupee’s strength.
As the week progresses, market participants are keeping a close eye on forthcoming economic indicators, particularly inflation data, as it is anticipated to influence trading patterns and the rupee’s performance against the US dollar. Overall, the dynamic interplay of global and domestic factors continues to shape the currency market, influencing investor decisions and market outcomes.
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