Rupee Gains Ground Against Dollar Amidst Equity Concerns and Foreign Outflows

Rupee gained: In early hours of tring on Thursday, Indian rupee demonstrated resilience against US dollar, gaining 8 paise to reach 83.44. This uptick came as a welcome relief after dollar retreated from its recent highs. However, market sentiments were tempered by concerns over domestic equity trends and ongoing foreign fund outflows.

At interbank foreign exchange market, rupee commenced tring at 83.49 against dollar before edging down to 83.44, marking a modest improvement from its previous close. Yet, currency remained under pressure due to substantial selling of Indian stocks by Foreign Portfolio Investors (FPIs), totalling over Rs 6,000 crore on Wednesday.

Anil Kumar Bhansali, He of Treasury and Executive Director at Finrex Treasury visors LLP pointed out impact of FPIs' stock sell-off, which bolstered dollar demand and weighed on rupee. Despite Reserve Bank of India's efforts to support local currency by selling dollars, possibility of sustained dollar buying loomed.

Meanwhile, global market dynamics influenced tring sentiments. dollar index, reflecting greenback's performance against or major currencies, saw marginal weakness, tring at 105.51. Notably, cautionary remarks from US Federal Reserve speakers regarding prolonged higher interest rates impacted market sentiment.

Brent crude futures experienced a slight uptick in commodities arena, rising by 0.43 per cent to USD 83.94 per barrel.

Domestically, early tring saw a downturn in equity market, with BSE Sensex shedding 176.2 points (0.24 per cent) to 73,290.19, and NSE Nifty slipping 49.75 points (0.22 per cent) to 22,252.75.

Foreign Institutional Investors (FIIs) continued ir net selling trend in capital markets, offloing shares worth Rs 6,669.10 crore on Wednesday, according to exchange data. 

With PTI  Inputs