Indian Rupee: Expected To See Some Relief In Opening Trades

9 Mar 2022 , 08:58 AM

The Indian rupee could see some relief in opening trades on Wednesday, 09 March 2022, extending recovery from the previous session on the back pause in dollar rally. Rupee hit a life-time low early this week as crude oil prices climbed to multi-year highs amid the Russia-Ukraine crisis. However, sustained foreign fund outflows and geo-political tensions would continue to weigh on the domestic currency.

On Tuesday, rupee recovered by 3 paise to close at 76.90 against the US dollar. At the interbank forex market, the local unit opened at 77.02 against the greenback and witnessed an intra-day high of 76.71 and a low of 77.05. The rupee finished at 76.90, registering a rise of 3 paise over its previous close. On Monday, the rupee fell for the fourth straight session and tanked 76 paise to close at 76.93, after touching its lifetime low of 77 against the US dollar.

Domestic equity market ended with sharp gains on Tuesday, snapping a four-day losing streak. The barometer index, the S&P BSE Sensex, jumped 581.34 points or 1.10% at 53,424.09. The Nifty 50 index advanced 150.30 points or 0.95% at 16,013.45. Foreign portfolio investors (FPIs) sold shares worth Rs 8,142.60 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 6,489.59 crore in the Indian equity market on 8 March, provisional data showed.

Meanwhile, state-owned insurance behemoth Life Insurance Corporation of India (LIC) on Tuesday has reportedly received capital markets regulator Sebis go-ahead to raise funds through an initial share sale. The government will sell over 31 crore equity shares of LIC.

Overseas, Asian stocks edged higher on Wednesday, recovering partially from losses earlier in the week as investors continue to assess the potential economic ramifications of the ongoing war in Ukraine. Markets in South Korea are closed on Wednesday due to the countrys presidential election. US stocks declined on Tuesday as investors continue to assess geopolitical tensions between Russia and Ukraine and high commodity prices.

Oil prices jumped to their session highs on Tuesday after President Joe Biden said the U.S. will ban imports of Russian oil, a further escalation in the international response to Moscows invasion of Ukraine. The United Kingdom also announced its own plans to phase out its reliance on Russian oil imports by the end of the year.

Meanwhile, the dollar index, which measures the greenback against a basket of six global peers, was flat to slightly lower at 99.01. However, the safe-haven dollar remains in demand despite Tuesdays slight pullback. Since Russias invasion on Feb. 24, the dollar has gained around 3.3% as the crisis has intensified.

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