Rupee Sees Modest Gain Against Dollar on Positive Equities; Forex Reserves Dip

Rupee modest gain: The Indian rupee edged up by 3 paise against the US dollar in early Monday trade, reaching 83.42, buoyed by a favourable performance in domestic equities.

Despite the US dollar's strength in global markets and ongoing foreign fund outflows, the rupee managed a slight appreciation, opening at 83.43 and touching 83.42 in initial trading, marking a 3-paise increase from the previous close.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP noted the rupee's resilience against the dollar. He attributed the limited movement to consistent purchases of US dollars by Foreign Portfolio Investors (FPIs) and oil companies, with the Reserve Bank of India (RBI) intervening to prevent significant depreciation beyond the 83.50 mark.

The dollar index, which measures the dollar's performance against a basket of major currencies, was marginally up at 105.16, gaining 0.13 per cent.

Market sentiment remained stable, with expectations of potential rate cuts in the US following a softer-than-expected jobs report, as highlighted by Bhansali.

In the oil market, Brent crude futures saw a modest rise of 0.23 per cent, reaching $83.15 per barrel.

Domestically, early trading in the equity market showed positive momentum, with the BSE Sensex climbing 434.04 points or 0.59 per cent, and the NSE Nifty advancing 91.60 points or 0.41 per cent.

However, Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, offloading shares worth Rs 2,391.98 crore.

Additionally, the RBI reported a decline in India's forex reserves by $2.412 billion to $ 637.922 billion as of April 26, marking the third consecutive weekly decrease in reserves.

With PTI Inputs