Indian Rupee: Expected To Be Range Bound

14 Mar 2022 , 08:53 AM

The Indian rupee is expected to stay somewhat range bound in opening trades on Monday, 14 March 2022 as investors continue to monitor the Russia-Ukraine situation although easing crude oil prices could lend some support to the local unit. Meanwhile, resurgence of Covid wave in China is likely to dampen sentiments. Further, sustained foreign fund outflows from Indian market and dollar strength could weigh down the domestic currency.

On Friday, rupee pared its initial increases and settled 18 paise lower at 76.61 against the US dollar. At the interbank foreign trade market, the rupee opened at 76.34 against the American dollar. The domestic unit wavered between a high of 76.27 and a low of 76.72 during the day and settled at 76.61 against the dollar, down 18 paise from the last close. On Thursday, the rupee had valued by 19 paise to close at 76.43.

Domestic benchmark indices ended with small gains on Friday, rising for the fourth straight session. The barometer index, the S&P BSE Sensex, rose 85.91 points or 0.15% at 55,550.30. The Nifty 50 index gained 35.55 points or 0.21% at 16,630.45. Foreign portfolio investors (FPIs) sold shares worth Rs 2,263.90 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,686.85 crore in the Indian equity market on 11 March, provisional data showed.

On the macro front, IIP grew by 1.32% on an annual basis in January 2022, which is an improvement from the 0.7% annual growth in December 2021 according to the data released by the National Statistical Office (NSO) on March 11. The Index of Industrial Production (IIP) had contracted by 0.6% in January 2021.

Overseas, Asian stocks are trading mixed on Monday as investors monitor a Covid wave in China. Meanwhile, oil prices continued to be volatile amid the Russia-Ukraine war. Investors continued watching developments on the Russia-Ukraine war, which is disrupting shipping and air freight. Elsewhere, markets also monitored a recent wave of Covid infections in China ? including the major city of Shenzhen.

US stocks dropped on Friday as the ongoing Russia-Ukraine conflict continued to unnerve investors. The U.S. government will revoke Russias most-favored nation trade status amid the conflict, the White House said Friday, noting that it will work with Group of Seven (G7) countries and the European Union to roll out new sanctions. In U.S. economic reports, data from the University of Michigan consumer sentiment survey showed a fall to an initial March reading of 59.7 from Februarys level of 62.8.

Meanwhile, the dollar index, that measures the greenback against a basket of currencies advanced to 99. 24 in early Asia, ahead of a number of central bank meetings around the world. The US central banks rate setting Federal Open Market Committee meets this week.

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