Mumbai, Jan 8 (PTI) The rupee pared all its initial gains to settle just 1 paisa higher at 83.14 against the US dollar on Monday, as the support from lower crude oil prices in international markets was offset by a weak trend in domestic equities.
A strong greenback against major rivals overseas also dented sentiment, forex dealers said.
At the interbank foreign exchange market, the local unit opened strong at 83.09 and oscillated between the peak of 83.04 and the lowest level of 83.16 against the greenback during the session.
The domestic currency finally settled at 83.14, up 1 paisa from its previous close.
On Friday, the domestic currency settled with a gain of 9 paise at 83.15 against the dollar.
The market’s attention has tuned towards the inflation data in the US, scheduled to be released on Thursday. Also, investors will keep a close eye on India’s inflation numbers to be released on Friday, said Jateen Trivedi, VP Research Analyst at LKP Securities.
“The outcome of this data will influence the direction of the dollar index. A lower CPI may push the dollar lower towards 101.50, while a higher reading could propel it higher towards 103.50. Globally, CPI numbers, including India’s, due on Friday, will be closely monitored. The rupee’s range-bound movement persists, fluctuating between 83.00-83.50,” Trivedi added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06 per cent higher at 102.18 on Monday.
Brent crude futures, the global oil benchmark, declined 1.14 per cent to USD 77.86 per barrel.
On the domestic equity market front, Sensex plunged 670.93 points, or 0.93 per cent, to settle at 71,355.22 points. The Nifty advanced 197.80 points, or 0.91 per cent, to 21,513.00 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they bought shares worth Rs 16.03 crore, according to exchange data.
On the domestic macroeconomic front, the services sector growth in India rose to a three-month high in December supported by favourable economic conditions and positive demand trends.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 56.9 in November to 59 in December, highlighting a sharp increase in output.
The country’s forex reserves jumped by USD 2.759 billion to USD 623.2 billion in the week ended December 29, the Reserve Bank said on Friday. PTI HVA BAL BAL
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