Rupee Rises 6 Paise Against US Dollar - Business News

Mumbai, Jan 4 (PTI) The rupee appreciated 6 paise to close at 83.24 against the US dollar on Thursday, helped by a bullish trend in domestic equities and weakness of the American currency in the overseas market.

However, rising crude oil prices capped sharp gains for the local unit, forex traders said.

At the interbank foreign exchange market, the local unit opened flat at 83.30 against the greenback.

The rupee oscillated between an intra-day low of 83.32 and a high of 83.21 against the greenback and finally settled at 83.24, higher by 6 paise from its previous close of 83.30.

The rupee gained for the second day in a trot following a weaker greenback after mixed signals from the Federal Open Market Committee (FOMC) meeting minutes.

"Better-than-expected service PMI number pushed the euro higher versus the US dollar. The rupee also accumulated the gain along with other Asian currencies after Eurozone data. However, the local unit trimmed the afternoon gains amid higher crude oil prices and importers' dollar demand," Dilip Parmar, Research Analyst, HDFC Securities, said, adding that "Spot USD/INR is expected to consolidate between 83.10 and 83.50".

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.32 per cent lower at 102.16.

Brent crude futures, the global oil benchmark, advanced 1.05 per cent to USD 79.07 per barrel.

"Positive momentum in the capital markets, particularly with a more than 1.10 per cent gain in the banking sector index, contributed to the rupee's upward movement. The rupee continues its range-bound trend, fluctuating between 83.15-83.45," Jateen Trivedi, VP Research Analyst at LKP Securities, said.

On the domestic equity market front, Sensex surged 490.97 points, or 0.69 per cent, to settle at 71,847.57 points. The Nifty advanced 141.25 points, or 0.66 per cent, to 21,658.60 points.

Foreign Institutional Investors (FIIs) turned net buyers in the capital markets on Thursday as they bought shares worth Rs 1,513.41 crore, according to exchange data.

On the domestic macroeconomic front, India's manufacturing sector growth fell to an 18-month low in December amid a softer increase in factory orders and output despite minimal inflation.

The HSBC India Manufacturing PMI survey, conducted by S&P Global, showed that there was a softer, albeit sharp, increase in factory orders and output, while business confidence towards the year-ahead outlook strengthened.

There are a number of risks in the market presently with Geo-Politics, war, unclear interest rate hikes/cuts risk with nobody in the market clear about what will happen next. The oil price risk due to geo-political tensions is also giving jitters to the market. The global economic slowdown is also one risk for this year 2024, Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

"Rupee is expected to remain within the range of 83.05/35 tomorrow as in-flows continue to hit the market while oil companies have slowed down a bit on oil buying and importers are also in a wait-and-watch mode expecting the rupee to strengthen. Markets await for NFPR data on Friday," Bhansali added.