Rupee appreciated by 21 paise to open at 85.87 against the US dollar in early trade on Thursday, buoyed by weakness in the greenback across global markets. However, gains were capped due to firm crude oil prices and continued outflows by foreign institutional investors (FIIs), according to forex dealers.
At the interbank foreign exchange market, the rupee opened at 85.91 and rose to 85.87, marking an improvement from Wednesday’s close of 86.08. The marginal appreciation came after the rupee had ended the previous session 3 paise lower.
Also Read:Rupee falls 12 paise to 86.09 as crude oil prices stay firm after brief dip
Greenback weakens on Fed chair succession buzz
The US dollar index — which tracks the greenback against a basket of six major currencies — slipped 0.27 per cent to 97.41, reversing gains from the prior session. The dip was attributed to speculation that US President Donald Trump may soon name a successor to Federal Reserve Chair Jerome Powell, possibly accelerating expectations of a shift in US interest rate policy.
“The greenback clocked more losses on a report that US President Donald Trump is to announce the successor to Federal Reserve Chairman Jerome Powell much earlier than expected in a likely bid to undermine Powell and spur expectations for interest rate cuts,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, as PTI reported.
Oil prices firm up on inventory drawdown
Brent crude futures rose 1.30 per cent to $68.01 per barrel, supported by a larger-than-expected drawdown in US inventories and sustained demand optimism. The weaker US dollar also contributed to higher oil prices, Bhansali noted.
Also Read:First Trade: Nifty hovers above 25,250, metal stocks lead gains
Markets open higher
On the equity front, Indian benchmarks opened on a positive note, extending bullish momentum seen in recent sessions. The Nifty50 index opened 52 points higher at 25,297, while the Sensex rose 92 points to 82,848. The Bank Nifty also gained close to 100 points to trade at 56,719.7.
Investor sentiment was lifted by the Reserve Bank of India’s upbeat bulletin on India’s economic resilience, easing geopolitical concerns, and moderating global crude oil prices.
Among Nifty50 stocks, early gainers included Bharat Electronics, Jio Financial Services, JSW Steel, Tata Steel, and Bajaj Finance. On the downside, Dr. Reddy’s Laboratories, Tech Mahindra, Kotak Mahindra Bank, SBI, and Infosys were among the top laggards.
Meanwhile, FIIs remained net sellers in the domestic equity market, offloading shares worth Rs 2,427.74 crore on Wednesday, according to exchange data.
(With inputs from PTI)
