The rupee pared initial gains and settled for the day in the negative territory, down 3 paise at 89.70 (provisional) against the U.S. dollar on Monday (December 22, 2025), as the support from positive domestic equities was negated by a recovery in crude oil prices.

Forex traders said the lack of progress in the U.S.–India trade negotiations weighed on the sentiment, while a weak tone in the U.S. dollar index supported the domestic unit at lower levels.

At the interbank foreign exchange, the rupee opened at 89.53 against the U.S. dollar, then touched an intra-day high of 89.45, registering a 22-paise gain from its previous close.

At the end of the trading session on Monday, the rupee was quoted at 89.70 (provisional), down 3 paise from its previous close.

On Friday, the rupee appreciated by 53 paise to 89.67 against the U.S. dollar.

“We expect the rupee to trade with a positive bias on a weak US dollar and strength in the domestic markets. We may not see a lot of fresh FII outflows ahead of new year holidays. However, delay in trade deal between India and U.S. may continue to weigh on the rupee at higher levels,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

Choudhary further noted that investors may watch out for U.S. GDP data. USD-INR spot price is expected to trade in a range of 89.20 to 89.80.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.08% lower at 98.52.

Brent crude, the global oil benchmark, was trading 0.86% higher at USD 61 per barrel in futures trade.

On the domestic equity market front, Sensex jumped 638.12 points to settle at 85,567.48, while the Nifty climbed 206 points to 26,172.40.

Foreign Institutional Investors purchased equities worth ₹1,830.89 crore on Friday, according to exchange data.

India’s forex reserves jumped by $1.689 billion to $688.949 billion during the week ended December 12, the Reserve Bank of India said on Friday. In the previous reporting week, the overall reserves increased by $1.033 billion to $687.26 billion.

Meanwhile, India and New Zealand on Monday announced the conclusion of negotiations for a free trade agreement, under which a host of domestic goods from sectors such as textiles, footwear, engineering, and marine products will get duty-free access in New Zealand.

Benchmark stock indices Sensex and Nifty surged nearly 1% on Monday (December 22, 2025) as investor sentiment remained positive amid foreign fund inflows and a rally in global markets on expectations of further monetary policy easing by the U.S. Federal Reserve.

Building on the previous session’s rally, the 30-share BSE Sensex jumped 638.12 points or 0.75% to settle at 85,567.48. During the day, it surged 671.97 points or 0.79% to 85,601.33.

The 50-share NSE Nifty climbed 206 points or 0.79% to close above the 26,000 mark at 26,172.40.

From the 30-Sensex firms, Trent, Infosys, Bharti Airtel, Tech Mahindra, Bharat Electronics and Maruti were among the biggest gainers.

However, State Bank of India, Kotak Mahindra Bank, Larsen & Toubro and Titan were the laggards.

In Asian markets, South Korea’s Kospi jumped over 2%, while Japan’s Nikkei 225 index climbed nearly 2%. Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index also settled in positive territory.

European markets were trading on a mixed note. U.S. markets ended higher on Friday.

“Indian markets extended their year-end rally, supported by strong liquidity and global cues, as expectations of further Fed easing in 2026 continue to underpin growth. FIIs turned net buyers, reinforcing the positive tone, with IT and metals leading gains,” Vinod Nair, Head of Research, Geojit Investments Limited, said.

Foreign Institutional Investors (FIIs) bought equities worth ₹1,830.89 crore on Friday, according to exchange data. Domestic Institutional Investors (DIIs) also bought equities worth ₹5,722.89 crore in the previous trade.

“A stabilising USD-INR exchange rate, coupled with data showing foreign portfolio investors turning net buyers of domestic equities over the past few sessions, triggered broad-based buying and short covering across derivative segments.

“Global risk appetite also remained firm, supported by expectations of further monetary policy easing by the U.S. Federal Reserve, which helped sustain the risk-on momentum across global markets,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

Brent crude, the global oil benchmark, climbed 0.86% to USD 60.99 per barrel.

On Friday, the Sensex jumped 447.55 points or 0.53% to settle at 84,929.36. The Nifty climbed 150.85 points or 0.58% to 25,966.40.