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The rupee gained 29 paise to settle at 79.45 against the US dollar on Wednesday on the back of heavy buying in domestic equities and persistent foreign capital inflows strengthening investor sentiment. Additionally, forex traders have noted that softening crude oil prices and easing inflationary pressures supported the domestic unit, according to news agency PTI report.
At the interbank forex market, rupee opened strong at 79.32 against the greenback and witnessed an intra-day high of 79.26 and a low of 79.48, and it finally ended at 79.45, registering a rise of 29 paise over its previous close of 79.74, the report said. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.06% to 79.74, while on the domestic equity market front, the BSE Sensex ended 417.92 points or 0.70% higher at 60,260.13, while the broader NSE Nifty advanced 119 points or 0.67% to 17,944.25.
Meanwhile, brent crude futures, the global oil benchmark, slipped 0.06% to USD 92.28 per barrel and foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth ₹1,376.84 crore, as per exchange data. After turning net buyers last month, foreign investors have continued to invest in Indian equities and pumped in ₹22,452 crore in the first two weeks of August, the report said.
Dilip Parmar, Research Analyst, HDFC Securities said, “the Indian rupee is well supported following lower crude oil prices and foreign fund inflows. However, traders are cautious ahead of FOMC minutes and expect corporate dollar outflows in the coming day which could limit the upside in the rupee."
Parmar further noted that in the near term, spot USD-INR is expected to consolidate in the range of 79.10 to 79.85, adding that “the Indian rupee has edged higher amid a 'risk on' mood and splendid gains witnessed in the domestic equities. After almost nine months of incessant outflows, domestic equities are seeing net inflows since July." Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking Ltd said, “besides, the decline in crude oil prices has eased concerns about elevated inflation, further supporting the domestic currency."
(With inputs from PTI)