Rupee gains for 2nd straight session on positive equities, rises by 7 paise

The rupee rose for the second straight session on Monday to close 7 paise higher at a one-and-a-half month high of 73.22 against the US dollar on the back of positive domestic equities and weak American currency.

At the interbank forex market, the rupee opened higher at 73.24 and moved in a narrow range of 73.16 to 73.26 in day trade.

"The Indian rupee appreciated on Monday extending gains from Friday against the greenback tracking strong local equities and on bets that the second COVID-19 wave in the country may have peaked," said Sriram Iyer Senior Research Analyst at Reliance Securities.

Regional currencies were mostly weaker against the US Dollar and capped gains, Iyer noted.

The rupee settled at 73.22, the highest closing level in this financial year. On Friday, the rupee had closed at 73.29 against the US dollar. The domestic unit has appreciated 20 paise in the last two trading sessions.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.09 per cent to 90.23.

On the domestic equity market front, the BSE Sensex ended 848.18 points or 1.74 per cent higher at 49,580.73, while the broader NSE Nifty advanced 245.35 points or 1.67 per cent to 14,923.15.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they pulled out Rs 2,607.85 crore on Friday, as per provisional data.

Brent crude futures, the global oil benchmark, rose 0.19 per cent to USD 68.84 per barrel. Meanwhile, India's COVID-19 tally mounted to 2,49,65,463 on Monday with 2,81,386 fresh COVID-19 cases, the lowest in 27 days, while the death toll climbed to 2,74,390 with 4,106 fatalities, according to Union health ministry data.

Meanwhile, India's wholesale inflation rate quickened by 10.49 per cent on year in April, government data showed.

"Rupee started the week on front foot in line with other Asian currencies after weak US retail sales number. The broad-based dollar weakness supported rupee to carry forward gains, after registering three consecutive weekly gains," said Dilip Parmar, Research Analyst, HDFC Securities.

According to Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, the rupee continued to consolidate in a narrow but with a marginal appreciation bias following sharp gains in domestic and global equities.

"Dollar that has been under pressure against its major crosses is likely to take cues from a few Federal Open Market Committee (FOMC) members' speech that is scheduled for today. We expect the USDINR (Spot) to trade sideways with a positive and quote in the range of 73.05 and 73.50," Somaiyaa said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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