Rupee Wipes Initial Losses, Edges Higher To 72.53 Against Dollar Amid Muted Domestic Markets

The rupee pared some of its initial gains to settle two paise higher against the US dollar on Thursday, March 18, at 72.53, tracking subdued domestic market sentiment and a stronger dollar overseas. At the interbank foreign exchange market, the domestic unit opened stronger at 72.48 against the dollar but could not hold on to gains, amid a massive selloff in the domestic equity markets. During the trading session, the local unit witnessed an intra-day high of 72.43 and a low of 72.60. In an early trade session, the rupee appreciated nine paise to 72.46 against the greenback. On Wednesday, March 17, the rupee had settled at 72.55 against the American currency.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, climbed 0.24 per cent to 91.65. According to forex traders, the persistent foreign fund inflows and lower crude prices supported the local unit.

”The USDINR future is trading in a consolidated on higher levels since last couple of session. The immediate resistance would be at 72.75 whereas 72.30 would act as a strong support level. In our anticipation, USDINR future likely to open around 72.50 in next session and if it breaks below 72.42 levels then we may expect bearish momentum towards 72.30. The trading range will likely to be in between 72.60 -72.30,” said Kshitij Purohit, Product Manager, Currency and Commodities at CapitalVia Global Research Limited.

On the domestic equity market front, the BSE Sensex ended 585.10 points or 1.17 per cent lower at 49,216.52, while the broader NSE Nifty slipped 163.45 points or 1.11 per cent to 14,557.85. 

“Nifty and Sensex were down 1.25 per cent today despite positive statements by US Fed on the interest rate outlook and continuance of accommodative policy. Indian market has been in a corrective phase for the past 10 days, due factors like high bond yields in US, slew of QIPs and IPOs taking away liquidity from the system and increased no of covid cases being reported across the country,” said Hemang Jani, Head Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services.

”Market may remain dull over in the near term but once the Q4 earning previews start flowing in there would be renewed interest by market participants,” he added.

According to exchange data, the foreign institutional investors remained net buyers in the capital market as they bought shares worth Rs 2,625.82 crore on March 17. Brent crude futures, the global oil benchmark, fell 0.35 per cent to $ 67.76 per barrel.