Mumbai, Jun 1 (PTI) The rupee appreciated by 35 paise to close at 82.40 against the US dollar on Thursday, as positive macroeconomic data strengthened investor sentiments.
At the interbank foreign exchange market, the local unit opened at 82.54 against the US dollar and witnessed an intra-day high of 82.36 and a low of 82.54.
It finally settled at 82.40, up 35 paise over its previous close amid sustained foreign fund inflows.
On Wednesday, the rupee had closed at 82.75 against the US currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.20 per cent to 104.12.
Global oil benchmark Brent crude futures advanced 0.17 per cent to USD 72.72 per barrel.
“The Indian rupee strengthened amid stellar economic data and foreign fund inflows. It has clocked the best single-day gain in almost two months following dollar inflows and lower commodity prices,” Dilip Parmar, Research Analyst, HDFC Securities said.
Foreign institutions bought USD 4.5 billion of domestic stocks in May, the most since November.
Though the spot USD-INR fell on Thursday, technical is signalling a continuation of the bullish trend, Parmar said, adding that looking ahead, traders will eye Friday’s US payrolls data ahead of the Federal Reserve’s June meeting.
“…some dovish comments from Fed members have reduced the odds of a rate hike in June. Over the near term, we expect USDINR to trade within a range of 82.00 and 82.70 on spot,” said Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
On the domestic equity market front, the 30-share BSE Sensex declined 193.70 points or 0.31 per cent to end at 62,428.54 points, and the broader NSE Nifty fell 46.65 points or 0.25 per cent to 18,487.75 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth Rs 71.07 crore, according to exchange data.
Manufacturing activities in India advanced further and touched a 31-month high in May supported by stronger increase in new orders and favourable market conditions.
Meanwhile, the Centre’s fiscal deficit narrowed to 6.4 per cent of the GDP in 2022-23 from 6.71 per cent in FY22.
Unveiling the revenue-expenditure data of the Union government for 2022-23, the Controller General of Accounts (CGA) said the fiscal deficit in absolute terms was Rs 17,33,131 crore (provisional), marginally down from the amount projected in the Revised Estimates (RE) in the Budget.
Moreover, according to official figures released on Wednesday, India’s economy grew by 6.1 per cent in the March quarter of 2022-23, pushing the annual growth rate to 7.2 per cent on account of better performance by agriculture, manufacturing, mining and construction sectors.
“We expect rupee to trade with a slight positive bias in the near-term on optimism due to bullish domestic macroeconomic data,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
The rise in risk appetite in global markets, weak oil prices and softness in US dollar may also support the rupee, Choudhary said, adding that concerns over global economic slowdown may prevent a sharp upside.
Traders may remain cautious ahead of US ADP non-farm employment, ISM manufacturing PMI and weekly unemployment claims data which is expected weaker than the previous reading, he said.
Market participants may also watch out for non-farm employment data tomorrow. “We expect the USD-INR spot to trade between 82 to 82.80 in the near-term,” he added. PTI DRR HVA
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