Rupee Climbs Moderately as Market Sentiment Weighs Down Equity Markets Despite Trade Optimism
The rupee concluded a mixed trading session Friday, gaining marginally against the US dollar despite strong equity market sell-offs and concerns over global peace talks. The currency settled at 94.34 (provisional), edging up by 6 paise against the dollar.Forex traders noted that initial optimism regarding potential trade momentum between India and the US boosted the rupee's opening performance. This positivity was, however, overshadowed by a firming Dollar Index and rising crude oil prices, which pressured overall investor sentiment across markets.
Rupee Performance Against USD Amid Geopolitical Uncertainty
The currency traded in a tight range of 94.20 to 94.52 during the session. At the interbank foreign exchange, the rupee opened at 94.30 against the US dollar and eventually closed at 94.34 (provisional). This marked a modest gain compared to Thursday's close of 94.40.Market sentiment experienced a dip due to uncertainty surrounding the ongoing US-Iran peace negotiations. The White House cited logistical issues, leading Vice President JD Vance to postpone his scheduled visit to Switzerland for talks with Iranian negotiators.
Equity Markets Plunge as Foreign Investors Offload Stakes
The domestic equity markets suffered significant losses on Friday. The Sensex plummeted by 607.08 points, settling at 76,802.90. Similarly, the Nifty fell by 154.90 points to close at 24,013.10.The downturn was partially attributed to foreign institutional investors (FIIs) who net-sold equities worth Rs 1,025.20 crore on Thursday, as reported by exchange data.
Trade Talks and Global Commodities Weigh In
Indian Foreign Secretary Vikram Misri provided updates on bilateral trade progress, noting that trade remains a key discussion point between Prime Minister Narendra Modi and US President Donald Trump. Both leaders have instructed their negotiators to expedite the finalized trade pact.Misri stated that significant headway has been achieved on the interim trade deal. Furthermore, US Trade Representative Jamieson Greer is slated to visit India next week to advance these discussions. This statement followed meetings held by Modi and Trump at the G7 Summit aimed at restoring strained bilateral ties.
Market Outlook and Commodity Trends
Analysts maintain a positive outlook for the rupee in the medium term. Dilip Parmar, Research Analyst at HDFC Securities, commented that the rupee is currently the leading performer among Asian peers, buoyed by returning risk-on sentiment and cooling oil prices driven by capital inflows. He projected the local currency could advance toward 94 on sustained dollar inflows.Technically, USDINR spot trading remains boxed between strong support at 94.10 and a critical resistance level of 94.90, according to the analyst. Meanwhile, the Dollar Index, which tracks the greenback against six currencies, was observed at 100.76, marking a slight decrease of 0.08 per cent. Global oil prices saw minor movement, with Brent crude trading down 0.65 per cent futures trade at USD 79.33 per barrel.
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