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07 Aug 2020, 15:15 HRS IST
  • PTI
  • Rupee jumps 37paise to nearly 2-week high on easing border tensions

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19:19 HRS IST

(Eds: Updates with expert comments)

Mumbai, Jun 23 (PTI)
The rupee on Tuesday appreciated by 37 paise to close at nearly two-week high of 75.66 against the US currencies following a rally in domestic equities and persistent foreign fund inflows on easing border tension with China.

Besides, an unstable US dollar against major global currencies also helped the rupee surge, forex dealers said.

At the interbank foreign exchange market, the rupee opened strong at 75.86. During the session the domestic unit swung between a high of 75.65 and a low of 75.89.

It finally settled at 75.66 against the US dollar, registering a rise of 37 paise over its previous close of 76.03. The closing level is the highest since June 10 when the rupee ended at 75.59.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 96.91.

Brent crude futures rose 0.67 per cent to USD 43.37 per barrel.

According to experts, reports that Indian and Chinese armies agreed to de-escalate border tension also boosted investor sentiment.

"Rupee rose for the second successive session following gains in domestic equities and the dollar falling broadly against its major crosses. Risk on sentiment primarily supported the rupee at lower levels. Some sources believe that Indian and Chinese armies have arrived at 'mutual consensus' to 'disengage' from all the friction points in eastern Ladakh," Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, said.

"From the US, market participants will be keeping an eye on preliminary manufacturing and services PMI number and weaker-than-expected number could keep the greenback weighed down," he added.

The BSE Sensex surged 519.11 points, or 1.49 per cent, to close at 35,430.43 while the NSE Nifty soared 159.80 points, or 1.55 per cent, to end at 10,471.

Foreign institutional investors were net buyers in the capital market, as they bought equity shares worth Rs 424.21 crore in the previous trading session on Monday, according to provisional exchange data.

"Rupee market tone remained positive as we expected with buoyant domestic equity bourses. The broader dollar index came back under pressure as after President Trump tweeted that the Phase 1 trade deal with China is still on track.

" Foreign fund inflows, weaker dollar index and dollar selling by exporters have supported the rupee in today's trade," Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities, said.

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