Rupee Settles Flat To 72.95 Against Dollar Amid Firm Domestic Equities

The rupee ended on a flat note and settled one paisa higher against the US dollar on Wednesday, February 3, at 72.95 (provisional) amid a firm trend in the domestic equity markets. At the interbank foreign exchange market, the domestic unit opened at 72.96 against the dollar and witnessed an intra-day high of 72.92 and a low of 72.98. In an early trade session, the local unit opened on a flat note, rising two paise to 72,94 against the American currency. On Tuesday, February 2, the rupee had finished at 72.96 against the American currency.

The dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.03 per cent to 91.17. "The USD-INR spot is not breaking the narrow range of 72.75-73.20. Right now, the market is very flat and volatility is muted. The bullish sentiments and inflows into local stocks confines the advance in rupee, but for that RBI''s protection around 72.75-73 zone should end," said Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services. Gupta further noted that traders are waiting for RBI policy outcome for more clarity over the trend. "We don't expect RBI to cut rates but any hint over future rate cut would be positive for rupee. So until the policy outcome we expect USD-INR spot to continue being sideways," he noted.

On the domestic equity market front, the BSE Sensex ended 458.03 points or 0.92 per cent higher at 50,255.75, while the broader NSE Nifty surged 142.10 points or 0.97 per cent to 14,789.95. 

“Markets cheered the Union budget and scaled back to new highs. We believe structurally Nifty50 is poised for further up-move in the medium term while short term consolidation is expected. We see a base for the index at 13450 while on the higher side 16000 is achievable. In the short term volatility is expected to be high and any correction should be used as a buying opportunity,'' said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities

According to exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 6,181.56 crore on February 2. Brent crude futures, the global oil benchmark, rose 0.99 per cent to $ 58.03 per barrel.