Indian Rupee Gains Ground Amid Market Volatility

1. Rupee Appreciation: The Indian rupee strengthened by 8 paise against the US dollar, reaching a rate of 83.44 in early trading on Thursday. This appreciation was attributed to the US dollar’s retreat from its previously high levels.

2. Factors Influencing Rupee Movement:

   • Negative trends in domestic equities and foreign fund outflows were cited as factors that weighed on the rupee’s performance, limiting its upward movement.
   • Foreign Portfolio Investors (FPIs) continued to sell Indian stocks, amounting to over Rs 6,000 crore on Wednesday, which contributed to rupee selling against the dollar.
3. Interbank Exchange Rate: The rupee opened at 83.49 against the US dollar at the interbank foreign exchange market and later touched 83.44, marking an 8 paise increase from its previous close.
4. Market Commentary: Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, remarked on the rupee’s performance, noting that despite RBI intervention to support the rupee, dollar buying could persist due to FPI activities.

5. Global Market Indicators:

   • The dollar index, which measures the dollar’s strength against other major currencies, was trading slightly lower at 105.51.
   • US Federal Reserve speakers warned of potentially prolonged higher interest rates, influencing market sentiment.
   • The US 10-year bond yield rose from 4.46% to 4.50%.
6. Commodity Prices: Brent crude futures, a global oil benchmark, saw a slight increase of 0.43% to $83.94 per barrel.

7. Domestic Equity Market Performance:

   • The BSE Sensex declined by 176.2 points or 0.24% to 73,290.19 in early trading.
   • The NSE Nifty fell by 49.75 points or 0.22% to 22,252.75 points.
8. Foreign Institutional Investors (FIIs) Activity: FIIs were net sellers in the capital markets on Wednesday, offloading shares worth Rs 6,669.10 crore according to exchange data.

Overall, the report provides insights into various factors influencing the movement of the Indian rupee against the US dollar, including domestic and global market dynamics, FPI activities, and RBI interventions.

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