Indian Rupee: Likely To Stay Range Bound

31 Jan 2022 , 09:03 AM

The Indian rupee is likely stay range bound with all eyes on the upcoming budget session that would be the key event that the market would be looking for. However, geopolitical tensions, elevated crude oil prices and hawkish US Fed stance driving greenback higher could weigh on the local unit.

On Friday, rupee snapped its three-day losing streak to close 5 paise higher at 75.04 against the US dollar. At the interbank foreign exchange market, the rupee opened at 75.12 a dollar and witnessed an intra-day high of 74.88 and a low of 75.13. The domestic unit finally settled at 75.04 against the American currency, up 5 paise over its last close of 75.09.

Domestic benchmark indices reversed intraday gains and ended with small losses on Friday. The barometer index, the S&P BSE Sensex, fell 76.71 points or 0.13% at 57,200.23. The Nifty 50 index slipped 8.20 points or 0.05% at 17,101.95. Foreign portfolio investors (FPIs) sold shares worth Rs 5,045.34 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 3,358.67 crore in the Indian equity market on 28 January, provisional data showed.

The Budget session of Parliament is set to commence today, 31 January 2022 and will conclude on 8 April 2022. Finance Minister Nirmala Sitharaman will table the Economic Survey for 2021-22 in the Lok Sabha on Monday soon after the Presidents Address to both Houses of Parliament. She will present the Union Budget for the next financial year beginning April 1, 2022, on Tuesday.

Overseas, Asian stocks are trading mixed Monday, with markets in mainland China and South Korea closed for the Lunar New Year eve. Regionally, markets in Hong Kong and Singapore are also set to close early on Monday ahead of the Lunar New Year holidays. US stocks rallied on Friday, notching its best day so far in 2022 after another zigzag session, bolstered by a marked rebound in tech shares. Shares of Apple jumped after a stellar quarterly result. The company reported its largest single quarter in terms of revenue ever even amid supply challenges and the lingering effects of the pandemic.

Meanwhile, the dollar index, which measures the greenback against six major peers was at 97.15, just below Fridays 18-month top of 97.441. The greenback had its best week in seven months last week supported by investors seeking safety amid a sell-off in riskier assets.

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