The rupee gained on Thursday, buoyed by a weaker Dollar index, which touched a one-week low on indications that a 75 basis points rate hike by the US Fed is off the table. at the next meeting. The repo rate hike by the Reserve Bank of India and Dollar inflows towards investment in LIC IPO also strengthened the Indian currency.
However, Government Securities (G-Secs) yields went up by up to 5 basis points due to the 50 basis points interest rate hike by the US Fed.
Opening stronger at 76.16 to the Dollar (USD) against previous close of 76.41, the Indian rupee (INR) briefly touched 75.99 intraday, an over three-week high.
However, dollar demand from oil marketing companies pushed the rupee to end the day at 76.25, up 16 paise over the previous close.
“The USDI-NR pair opened weak amid broad dollar weakening globally. However, the pair gained momentum later in the day on the back of higher bond yields.
“Surging crude prices also dented the sentiment for the rupee and made the rupee give up the initial gains,” IFA Global said in a report.
Sensex, Nifty end flat
Benchmark equity indices closed flat amid volatility on Thursday. The market opened on a positive note, tracking global cues and extended gains in the first half amid broad-based buying. Volatility persisted in the second half, with indices surrendering all gains to close flat, witnessing selling pressure across multiple counters. The BSE Sensex closed at 55,702.23, up 33.20 points or 0.06 per cent. It recorded an intraday high of 56,566.80 and a low of 55,613.82. The Nifty 50 closed at 16,682.65, up 5.05 points or 0.03 per cent. It recorded an intraday high of 16,945.70 and a low of 16,651.85.
Vinod Nair, Head of Research at Geojit Financial Services said, “The fear of an aggressive rate hike by the Fed was the prime reason for global volatility during the past few days. Fed’s decision to remain less hawkish with a 50bps rate hike downplayed the investor’s worries, helping the global markets to rally. However, the domestic market trimmed its gains towards the end of the day following a sell-off in US futures’.’