Rupee Settles Almost Flat To 74.87 Against Dollar Amid Muted Domestic Equities

The rupee rose one paisa higher against the US dollar on Thursday, October 21, to settle at 74.87 (provisional) tracking a muted trend in domestic equities. At the interbank foreign exchange market, the domestic unit opened at 74.86 against the dollar, and swung in the range of 74.69 to 74.89 during the trading session. In an early trade session, the local unit inched three paise higher to 74.85 against the greenback. The rupee ended at 74.87, registering a rise of one paisa over its previous close.

The local unit had surged by 47 paise to settle at a nearly two-week high of 74.88 against the dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.09 per cent to 93.64.

According to forex traders, foreign fund outflows, strengthening of the greenback and firm crude prices in the international market restricted the appreciation bias in the domestic currency.

What analysts say:

Mr Amit Pabari. MD, CR Forex:

''On the domestic front, equities extended their profit-booking leg for the second consecutive day yesterday as crude oil prices stretched their run-up towards multi-year highs and a surge in the US 10 year benchmark yield above 1.67 per cent - the highest level since May 20 also weighed on the local sentiment.

It could further worsen out in the near term as energy prices, especially, crude oil prices could show some fire as US inventories at the nation's largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply. This could weigh down on the rupee too.

Furthermore, US DXY could find support near 93.20-40 zone as Fed members are continuously toning hawkish ahead of Fed's 2-3rd Nov meet, where they are expected to start tapering program. That apart, the domestic flow story could calm down the expectation of the aggressive bearish move in the rupee.''
 

Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Limited:

''USDINR spot closed flat near 74.86 levels, due to push and pull of a weak US Dollar Index and falling Indian stocks. With oil prices holding at higher levels, the pace of decline in USDINR can slow. Bias continues to downward as long as the pair holds below 75.10 levels on spot. With strength in emerging market currencies, rupee can appreciate towards 74.50/60 levels in the coming days.''

Domestic Equity Markets Today:

On the domestic equity market front, the BSE Sensex ended 336.46 points or 0.55 per cent lower at 60,923.50, while the broader NSE Nifty fell 88.50 points or 0.48 per cent to 18,178.10.
 

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Limited:

''Weak global cues triggered selling pressure for the third day in a row, while for one more time bears took the aggressive stance near the 18350 resistance level. Technically, after a short-term price correction, the Nifty took support near the 18050 level and reversed sharply.

The index has formed a bearish candle on daily charts but at the same time, it took support near the important retracement level of 18030. We are of the view that the intraday texture of the market is weak and is likely to continue in the near future. However, 18150 would be the immediate support level for the day traders.''

According to exchange data, the foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth ₹1,843.09 crore. Brent crude futures, the global oil benchmark, fell 1.05 per cent to $84.92 per barrel