Rupee Surges as Oil Softness and Global Stability Reduces Supply Fears
The Indian rupee strengthened on Tuesday, appreciating 48 paise against the US dollar and settling provisionally at 94.95. This rally was primarily driven by improved global risk sentiments and reduced supply uncertainty in critical shipping routes.Foreign Exchange Market Gains Momentum
The interbank foreign exchange market saw the rupee trade within a range of 94.94 to 95.37 during intraday trading, having opened at 95.33. The movement provided relief after the currency depreciated by 25 paise to close at 95.43 on Monday.Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, noted that the rupee benefited from both improved global risk sentiments and a weaker dollar. Disappointing ISM services PMI data also offered support to the currency. Traders are advised that hedging demand from importers may potentially cap any sharp upside movement.
Global Commodity Shifts Drive Rupie Appreciation
A key factor supporting the rupee's gains was softness in crude oil prices. Saudi Arabia announced a reduction of $11 per barrel for Asian markets, easing inflationary pressures for India, which is the world's third-largest oil importer.Improved traffic flows through the Strait of Hormuz further calmed supply fears globally. Choudhary added that improved global risk sentiments tied to this movement also underpinned the rupee's performance. While Brent crude traded higher by 1.19 per cent at $72.85 per barrel in futures trade, the reduction in oil prices offered significant relief.
Domestic Equities See Moderate Dip
The domestic equity markets experienced a decline as global sentiment shifted. The Sensex fell 104.35 points to close at 78,180.72. Similarly, Nifty closed down by 31.65 points at 24,398.70.Despite the market dip, Foreign Institutional Investors (FIIs) maintained a net positive stance on Monday. Exchange data revealed that FIIs purchased equities worth Rs 243.03 crore on a net basis. The USD-INR spot price is currently expected to trade within the range of 94.60 to 95.30, according to market forecasts.
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