Indian Rupee: Momentum Likely To Stay Firm

Indian Rupee: Momentum Likely To Stay Firm

Oct 21, 2021 08:10 IST capital market

Weakness in the US dollar overseas and easing crude oil prices are expected to keep rupee momentum firm in opening trades on Thursday, 21 October 2021. Optimistic gains in overnight global equities are also likely to further support the domestic currency. Nevertheless, developments in oil and dollar would be watched for further direction.

On Wednesday, rupee surged by 47 paise to close at 74.88 against the US dollar. At the interbank forex market, the local unit opened strong at 75.10 against the greenback and later gained strength to settle at 74.88, higher by 47 paise over its previous close of 75.35. The local unit moved in a range of 74.83 to 75.13 in the day trade. The currency market was closed on Tuesday for the Id-E-Milad holiday.

Domestic equity benchmarks ended with significant cuts on Wednesday. The Nifty 50 index lost 152.15 points or 0.83% to 18,266.60. It reversed trend after hitting the days high of 18,458.30 in morning trade. Foreign portfolio investors (FPIs) sold shares worth Rs 1,843.09 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,680.73 crore in the Indian equity market on 20 October, provisional data showed.

Overseas, Asian stocks are trading mixed on Thursday, as investors monitored shares of developer China Evergrande Group in Hong Kong. Evergrande shares dropped sharply on Thursday, returning to trade on Thursday after a halt that lasted more than two weeks. In US, the S&P 500 and the Dow climbed on Wednesday with the Dow hitting an intraday record high as investors eyed better than expected third-quarter earnings from U.S. companies.

Meanwhile, the dollar dipped on Wednesday as risk sentiment improved and as investors focused on rising commodity prices and when global central banks are likely to begin hiking interest rates to fend off persistently high inflation. The dollar index fell to 93.52.

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