Rupee ends higher at 73.58 per dollar

Indian rupee ended with marginal gains at 73.58 per dollar, amid buying seen in the domestic equity market

It opened 17 paise higher at 73.47 per dollar against previous close of 73.64 and traded in the range of 73.47-73.60.

At close, the Sensex was up 403.29 points or 0.87% at 46,666.46, and the Nifty was up 114.80 points or 0.85% at 13,682.70.

Oil prices dropped on Wednesday on a surprise gain in crude oil inventories in the United States and as investors continued to worry about demand for fuel being squeezed amid tighter lockdowns in Europe to counter the coronavirus pandemic.

"Sustained portfolio inflows, visible progress on the vaccine roll-out globally and weakness in greenback are the drivers which are pushing the rupee on the upwards trajectory. Value erosion in dollar and excessive liquidity is driving FIIs to load up on emerging markets equities, specially Indian equities in a big way, pushing them to a record high. We are also witnessing a strong recovery in demand in the economy, which is leading to strength in the rupee as the year draws to a close," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

"The local unit looks to march further on the higher side towards 73.20-73 mark, from where we might see some retracement. Markets would now be looking forward to further guidance from the US Fed in its last policy meeting of the year, which will further steer the rupee," she added.

The dollar languished near 2 1/2-year lows on Wednesday as progress toward a massive U.S. government spending bill and COVID-19 relief measures whetted risk appetite, sapping demand for the safest assets.

As the Dollar index saw a range bound move, the USDINR also remained largely range bound. However, considering the significant Put base placed near 73.50, a round of recovery is expected from these levels, said ICICIdirect.