Rupee recovers by 5 paise, ends 2-day losing streak

Brent crude futures, the global oil benchmark, rose 1.28 per cent to USD 40.29 per barrel.

Mumbai: Snapping its two-day losing streak, the rupee recovered by 5 paise to settle at 73.55 against the US dollar on Wednesday helped by forex inflows into equities.

Forex traders said corporate dollar inflows supported the rupee and the focus will be on Reliance stake sales.

At the interbank forex market, the domestic unit opened at 73.67 against the US dollar and dropped to the day’s low of 73.73 as equity markets declined.

The rupee arrested its fall towards the end of the trade and touched the day’s high of 73.47. The local unit finally settled at 73.55, registering a rise of 5 paise over its last close.

On Tuesday, the rupee had depreciated by 25 paise to more than one-week low of 73.60. It had declined by 21 paise on Monday.

“The session started with losses amid risk-off sentiments in the region. However, towards the end of the session the rupee appreciated significantly supported by portfolio flows into the equity markets,” said Sriram Iyer, Senior Research Analyst, Reliance Securities.

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Corporate dollar inflows supported the rupee and the focus will be on Reliance stake sales, traders said.

US private equity firm Silver Lake Partners will buy 1.75 per cent stake in billionaire Mukesh Ambani-run Reliance Industries Ltd’s retail arm for Rs 7,500 crore and may be followed by KKR & Co.

Iyer further said that “on the international front US Dollar index is trading firm this Wednesday afternoon ahead of the central bank meetings over the next couple of weeks”.

According to Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services, the optimism over coronavirus vaccine seems to have halted, also the ongoing border skirmish between India and China is leading to risk aversion.

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AstraZeneca said it is pausing trials of its COVID-19 vaccine candidate following a recipient developing a “potentially unexplained” illness.

“In USDINR spot 74 remains as a strong resistance, only a consistent trading above that will open doors for 74.50 zone. While, 73.35 will act as a strong support,” Gupta said.

After slumping 430.09 points during the day, the 30-share BSE benchmark recovered some lost ground to end at 38,193.92, down 171.43 points or 0.45 per cent. The NSE Nifty settled 39.35 points or 0.35 per cent lower at 11,278.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.10 per cent higher at 93.54.

Brent crude futures, the global oil benchmark, rose 1.28 per cent to USD 40.29 per barrel.

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