Image used for representative purpose only.
| Photo Credit: Reuters

The rupee rose 6 paise to 83.70 against the U.S. dollar in early trade on Thursday, reflecting strong investor sentiment after the U.S. Federal Reserve decided to cut interest rate in line with market expectations.

The rupee also got support from lower crude oil prices, positive domestic equity markets as well as inflow of foreign funds, forex traders said.

A stronger greenback, however, capped the upward movement in the local unit, they added.

At the interbank foreign exchange market, the Indian currency opened at 83.70 and inched up to 83.69 before trading at 83.70 against the greenback, registering a gain of 6 paise from its previous closing level.

On Tuesday, the local unit had gained 10 paise to settle at 83.76 against the U.S. dollar.

The Forex market was closed on Wednesday due to the holiday declared by the Maharashtra government.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.46% to 100.75.

Analysts attributed the recovery of the dollar index to the U.S. Fed’s decision to reduce the interest rate by 0.50%. Fed Chair Jerome Powell also indicated that the world’s largest economy is on track to achieve the targetted level of inflation at 2%.

Brent crude, the international benchmark, fell 0.03% to $73.63 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex surged 595.85 points, or 0.72%, to a record high of 83,544.08, while the Nifty soared 176.65 points, or 0.70%, to reach an all-time peak of 25,554.20.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth ₹1,153.69 crore, according to exchange data.

The latest government data released on Wednesday showed net direct tax collection grew 16.12% to over ₹9.95 lakh crore so far this fiscal on higher advance tax mop-up.

Image used for representative purpose only.
| Photo Credit: ANI

Indian shares are set to open marginally higher on Thursday (September 19, 2024) as the U.S. Federal Reserve started its monetary easing cycle with a large 50-basis-point rate cut.

The GIFT Nifty was at 25,453.5 points as of 08:08 a.m. IST, indicating the NSE Nifty 50 will open slightly above its close of 25,377.55 on Wednesday.

The Fed cutting rates could boost the markets to record highs, two analysts said.

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“This rate cut will facilitate inflows to emerging markets like India,” said Nilesh Shah, managing director at Kotak Mahindra Asset Management Company.

India’s information technology and pharma companies, which earn a significant share of their revenue from the U.S., will be in focus.

Other Asian markets rose, with the MSCI Asia ex-Japan index rising 0.25%.

Foreign institutional investors and domestic institutional investors net bought Indian stocks on Wednesday, purchasing ₹11.54 billion ($137.91 million) and 1.52 billion rupees of shares, respectively, according to provisional data from the National Stock Exchange of India.