The rupee improved 15 paise to close at 75.37 (provisional) against the US dollar on Wednesday, October 13, tracking a rally in domestic equities and a weakening US currency in global markets. In the interbank forex market, the local unit firmed up at 75.29 against the dollar and ranged between 75.19 and 75.51. In the opening trading session, the domestic unit advanced 26 paise to 75.26 against the greenback.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.27 per cent to 94.26. According to forex dealers, fall in crude oil prices also supported the rupee sentiment.
What Analysts Say:
Mr Amit Pabri, MD, CR Forex:
“After making a low of 75.16 yesterday, the USDINR pair rose sharply towards 75.66; There was a recovery of 50 paise from the bottom amid strength in crude oil. This would have put pressure on the importers to hedge their short-term dues. Also, carry traders who have been betting on the rupee for more than a year are now opening their positions due to low volatility and high returns.
If the USDINR pair makes any constructive move above this zone based on the weekly close, one can expect a further upside move towards the 76.00 level in the short term and 76.50-77.00 level in the medium term. However, the RBI—which doesn’t need any approval to intervene—can jump into the market anytime and launch a rescue operation. Thus, it is a ‘make or break’ condition for the USDINR pair.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Limited:
“USDINR spot closed 14 paise lower on one-time corporate inflows. At the same time, falling US bond yields and oil prices and a rally in stock markets placed a cap on the USDINR. Tonight’s focus will be on US CPI and US FOMC minutes. The bias continues upwards and the expected range is likely to be in the 74.90 to 75.70 level.
Domestic Equity Markets Today:
After touching a record peak of 60,836.63 during the session, the BSE Sensex closed 452.74 points or 0.75 per cent higher at 60,737.05, continuing its winning streak for the fifth consecutive day. Similarly, Nifty rose 169.80 points or 0.94 per cent to reach 18,161.75 – touching an intra-day record of 18,197.80.
Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities Limited
With both Sensex and Nifty hitting fresh record highs, markets dominated by auto and IT stocks witnessed a spectacular rally. Benchmark Nifty maintained a strong breakout continuation which clearly suggests a further trend from the current levels.
We believe that the short-term chart formation is still on the longer side but due to an overstretched intraday rally, bulls may take caution between the 18250-18275 levels. For day traders, 18100 will act as a key support level. Above this, the uptrend wave will continue to the level of 18200-18275.
According to exchange data, foreign institutional investors were net sell-offs in the capital market on October 12 as they offloaded shares worth Rs 278.32 crore. Global oil benchmark Brent crude futures fell 0.40 per cent to $83.09 a barrel.