Image Source : PIXABAY Rupee
The rupee continued its upward trend for the ninth consecutive session, closing 6 paise higher at 82.89 against the US dollar on Monday.
The surge was attributed to a strong performance in the domestic stock markets. Opening at 82.82, the rupee fluctuated between 82.77 and 82.91 during intra-day trading. The positive momentum over the past nine sessions saw the rupee add 48 paise since January 2, when it was at 83.32 against the dollar.
The bullish trend in domestic equities, leading to lifetime highs in benchmark indices, contributed to the rupee’s strength. The dollar index, measuring the greenback against a basket of six currencies, showed a 0.09 per cent increase at 102.49. Brent crude futures slipped 0.66 per cent to USD 77.77 per barrel, but concerns about global crude oil prices and escalating geopolitical tensions in the Middle East could limit sharp gains for the rupee.
Wholesale inflation
Despite a slight increase in the wholesale price index (WPI)-based inflation to 0.73 per cent year-on-year in December 2023, driven by a sharp rise in food prices, it was lower than the forecast of 0.9 per cent.
The WPI inflation had turned positive in November at 0.26 per cent after being in the negative zone from April to October.
“We expect the rupee to trade with a slight positive bias on the weak US Dollar and positive global markets. Expectations of fresh inflows from foreign investors may also support the rupee,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Traders are expected to remain cautious ahead of India’s trade balance data. The USD/INR spot price is projected to trade in the range of Rs 82.50 to Rs 83.20, as per Choudhary.
Market rally
The domestic equity market witnessed the Sensex surging to a fresh peak of 73,327.94 points, a gain of 759.49 points (1.05 per cent), while the Nifty reached a new record of 22,097.45 points, rising by 202.90 points (0.93 per cent).
Foreign institutional investors (FIIs) were net sellers in the equity market on Friday, offloading shares worth Rs 340.05 crore, according to exchange data.
Retail inflation rose to a four-month high of 5.69 per cent in December, while industrial production fell to an eight-month low of 2.4 per cent in November, based on government data released on Friday.
(With PTI inputs)
READ MORE: Rupee rises 18 paise to 82.77 against US dollar amid market rally
READ MORE: Wholesale inflation increases to 0.73 per cent in December on rising food prices
