Recording losses for the third straight session, the rupee on Thursday, June 10, closed nine paise lower at 73.06 against the US dollar, while domestic equities posted significant gains. The local unit today broke the 73 mark against the US currency. At the interbank forex market, the domestic unit opened higher at 72.96 against the dollar and moved in a range of 72.94 to 73.12 during the day. The domestic unit has lost 26 paise in the last three trading sessions.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.09 per cent to 90.20. According to forex traders, the local unit traded in a narrow range as investors watched key US inflation data and the European Central Bank meeting later in the day for further signals.
“There hasn’t been much change in currency levels since yesterday. USDINR flat while GBPUSD has fallen and so is EUR. Today’s inflation is significant, but perhaps markets have agreed with the Fed’s view that inflation is on a short-term pace and accordingly the US 10-year yield is below 1.50 per cent,” said Mr. Anil Kumar Bhansali, Finrex Treasury Advisors
“The implied volatility in the USDINR pair is at a multi-month low, which is an indication that the pair has been trading in a very narrow range for the past few days and is due for a breakout… Higher fiscal deficit, lower growth, and higher inflation due to rise in prices, MSP and RBI active downside indicates the possibility that the pair will break on the upside,” said Mr. Amit Pabri, MD, CR Forex.
“So far, the rupee has been supported only on account of inflows on account of various IPOs, stake sales and bond issues. However, RBI’s activation with importers rushing to cover the dollar will keep the rupee under pressure. Overall, USDINR remains an important resistance for the pair to set further path towards Rs 73.25-73.30,” Mr. Pabri said.
On the domestic equity market front, the BSE Sensex closed 358.83 points or 0.69 per cent higher at 52,300.47, while the broader NSE Nifty ended 102.40 points or 0.65 per cent higher at 15,737.75.
The market has formed an “Inside Body” candlestick formation on the daily chart which acts as a bullish continuation formation, especially if the market breadth is exceptionally strong. Negative closing of each stock in the market today In comparison, three stocks closed in positive territory and all sectors closed in positive territory. This is the exact opposite image of the previous day. Today market closed at 15738/52300, said Shrikant Chauhan, Executive Vice President, Equity Technical Research, Kotak Securities which is above the average level of the previous day.
According to exchange data, foreign institutional investors were net sell-offs in the capital market on June 9 as they offloaded shares worth Rs 846.37 crore. Global oil benchmark Brent crude futures rose 0.07 per cent to $72.27 per barrel.