The rupee registered gains for the fifth straight session and surged 11 paise against the US dollar on Wednesday, December 30, settling at 73.31, tracking positive domestic equities and sustained foreign fund inflows. At the interbank foreign exchange market, the local unit opened at 73.35 against the dollar and registered an intra-day high of 73.26. It witnessed a low of 73.36. In the opening trade session, the domestic unit climbed by nine paise to 73.33 against the greenback. The rupee finally settled at 73.31, registering an increase of 11 paise over its previous close. On Tuesday, December 29, the local unit closed higher at 73.42 against the American currency. The rupee has now a total of 53 paise in the last five consecutive trading sessions.
According to forex traders, a weaker American currency in the overseas markets also supported the rupee. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.21 per cent to 89.80. “After a pandemic ravaged year, the risk sentiments are ending 2020 on a positive note on the back of US fiscal stimulus, Brexit deal and coronavirus vaccine. However, until the global economy is capable of recovering at a rapid pace once COVID-19 is defeated, the upside risk to USDINR spot will remain intact,” said Mr. Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
”With the viable vaccine’s ability to battle even the transmissible variant of the virus, the worries of further lockdowns has been eased. So what happens to Indian rupee largely depends on how the major economies controls the virus in 2021. In USDINR spot, since the beginning of Dec, the psychological level of 74 has not been breached and the spot is trading below that. So we expect the short term range to be 73-74, only either side breakout will provide further clarity over the trend,” he added.
On the domestic equity market front, the BSE Sensex ended 133.14 points or 0.28 per cent higher at 47,746.22, while the NSE Nifty surged 49.35 points or 0.35 per cent to 13,981.95.
“Market continue to trade with a positive bias. We believe the short, as well as the medium-term trend, is positive. Since there has been an aggressive and hence expect volatility to be high. Range for Nifty50 is seen at 13600-14300 with buying on dips advisable. Medium term target seen at 14700-14800 levels. Cement, FMCG and select BFSI stocks look attractive at current levels,” said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities.
According to provisional exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,349.53 crore on December 29. Brent crude futures, the global oil benchmark, rose 0.80 per cent to $ 51.50 per barrel.