Rupee Rises 6 Paise vs US Dollar: Strong Equity Markets Drive Gains

Mumbai, Jan 12 (PTI) The rupee strengthened for the eighth consecutive session to settle with a gain of 6 paise to 82.95 against the US dollar on Friday, buoyed by a rally in domestic equity markets.

Rising crude oil prices in the international market and a strong greenback overseas restricted the gain in the domestic unit, forex traders said.

Investors were also concerned about the domestic macroeconomic data to be released later in the day, they added.

At the interbank foreign exchange, the domestic currency opened weak at 83.08 and traded between 82.86 and 83.10 against the greenback during intra-day deals.

The unit finally settled at 82.95 against the dollar, registering a gain of 6 paise over its previous close.

The domestic currency settled 2 paise higher at 83.01 on Thursday.

In the last eight trading sessions, the local unit added 37 paise, since the level of 83.32 versus the dollar recorded on January 2.

The rupee gained on strong domestic markets and a weak US dollar. However, the surge in crude oil prices amid the escalation of tensions in the Middle East capped sharp gains, Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

"Traders may remain cautious ahead of inflation and IIP data from India. USD-INR spot price is expected to trade in a range of Rs 82.55 to Rs 83.20," he added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.09 per cent higher at 102.38 on Friday.

Brent crude futures, the global oil benchmark, surged 2.95 per cent to USD 79.69 per barrel.

On the domestic equity market front, Sensex surged 847.27 points, or 1.18 per cent, to settle at a fresh peak of 72,568.45 points. The Nifty also soared 247.35 points, or 1.14 per cent, to a new record of 21,894.55 points.

Foreign institutional investors (FIIs) sold shares worth Rs 340.05 crore on Friday, according to exchange data.

On the macroeconomic front, the net direct tax collection so far this fiscal rose 19.41 per cent to Rs 14.70 lakh crore, reaching about 81 per cent of the full-year target, the income tax department said on Thursday.

Jateen Trivedi, VP Research Analyst, LKP Securities, said the rupee kept its positive moves after the US inflation data dented hopes of early interest rate reduction by the Federal Reserve.

"RBI still seems to be in much control of the rupee as 83.30-83.40 has been held by the rupee, and intervention is visible at lower levels of the rupee. The short-term trend in the rupee is now positive as we are now above 82.95 after almost 4 months after Sep '23. Going ahead rupee can be seen in the range of 82.70-83.15," Trivedi added.