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The rupee pared its initial gains and settled on a flat note at 83.99 against the U.S. dollar on Monday (October 7, 2024) on selling pressure from foreign funds and weak tone in the domestic markets.
Forex traders said elevated crude oil prices and escalating tensions between Israel and Iran weighed on the local unit, while all-time high forex reserves boosted investor sentiments.
At the interbank foreign exchange, the rupee opened at 83.96 against the U.S. dollar and touched an intra-day high of 83.95 and a low of 83.99.
The domestic currency finally ended the day at 83.99 (provisional), unchanged from its previous closing level.
“We expect the rupee to trade with a negative bias on selling pressure from foreign funds and weak tone in the domestic markets. Escalating tensions between Israel and Iran may further pressurise the rupee,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.
Mr. Choudhary said traders may take cues from comments by U.S. Fed officials.
“Investors may remain cautious ahead of the RBI’s monetary policy meeting outcome on Wednesday,” he said, adding that USDINR spot price is expected to trade in a range of ₹83.80-84.20.
Meanwhile, India’s forex reserves jumped $12.588 billion to a new all-time high of $704.885 billion for the week ended September 27, the Reserve Bank of India (RBI) said on Friday.
On the domestic equity market front, the Sensex fell 638.45 points, or 0.78%, to close at 81,050.00. The Nifty declined 218.85 points, or 0.87% to settle at 24,795.75. Both indices suffered losses in the previous week.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.07% to 102.59.
Brent crude, the international benchmark, advanced 2.09% to $79.68 in futures trade.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, offloading shares worth ₹9,896.95 crore on a net basis in the cash segment, according to exchange data.
Published – October 07, 2024 05:07 pm IST
