Mumbai, May 16 (PTI) The rupee stayed range-bound and settled 4 paise lower at 83.50 against the US dollar on Thursday, weighed down by unabated foreign fund outflows amid investors’ weak appetite for riskier assets.
However, a firm trend in domestic equities supported the local unit and restricted its losses, forex traders said.
At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.45 and touched an intraday high of 83.44 and a low of 83.50.
The domestic unit finally settled for the day at 83.50, down 4 paise from its previous close.
On Wednesday, the rupee had settled at 83.46 against the US dollar.
“The Indian rupee underperformed among the Asian currencies amid higher imported commodity prices and foreign fund outflows amid worries about election results. The rate markets started pricing in rate cuts this year after recent inflation readings,” Dilip Parmar, Research Analyst, HDFC Securities, said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.40, higher by 0.06 per cent.
Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 82.48 per barrel.
Oil price has corrected substantially following a surge to USD 93 per barrel and is currently hovering around USD 82 per barrel. This decline in oil prices is set to have a beneficial effect on India’s trade balance, especially considering that petroleum products make up 25 per cent of its total import spending, according to experts.
The reduced oil prices are anticipated to ease the strain on the trade deficit, providing a more positive outlook for the rupee.
On the domestic equity market, the 30-share BSE Sensex advanced 676.69 points, or 0.93 per cent, to close at 73,663.72 points. The broader NSE Nifty settled 203.30 points or 0.92 per cent higher at 22,403.85 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 776.49 crore, according to exchange data. PTI DRR DRR BAL BAL
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