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Rupee extends gains for 2nd day on stocks rally, closes at 74.19 against dollar

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.07 per cent to 93.04.

August 24, 2021 / 06:13 PM IST

The rupee appreciated further by 3 paise to close at 74.19 against the US dollar on Tuesday following a strong rally in the domestic equity markets.

However, a strong dollar in the overseas markets and rising crude prices weighed on the investor sentiment and capped gains, forex traders said.

At the interbank forex market, the local unit opened strong at 74.12 against the greenback and moved in a range of 74.11 to 74.20 in the day trade.

It finally ended at 74.19 against the American currency, registering a rise of 3 paise over its previous close of 74.22. The rupee had gained 17 paise on Monday.

Equity benchmark indices Sensex and Nifty surged to fresh lifetime highs on heavy buying in banking, finance and metal stocks amid supportive global cues on Tuesday. Sensex ended 403.19 points or 0.73 per cent higher at 55,958.98, while Nifty advanced 128.15 points or 0.78 per cent to 16,624.60.

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Finance Minister Nirmala Sitharaman on Monday unveiled an ambitious Rs 6 lakh crore National Monetisation Pipeline (NMP) that included unlocking value by involving private companies across infrastructure sectors -- from passenger trains and railway stations to airports, roads and stadiums.

"Rupee market appears to be taking rest after Monday's sharp appreciation. The tone was fairly positive for equities and the dollar facing a few headwinds ahead of the US Jackson Hole symposium, due later this week," Dilip Parmar, Research Analyst, HDFC Securities, said.

Spot USD/INR is expected to stay in a range of 74.10 to 74.50 in the next couple of days, he added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.07 per cent to 93.04.

Brent crude futures, the global oil benchmark, increased 1.34 per cent to USD 69.67 per barrel.

Foreign institutional investors remained net sellers in the capital market on Monday as they offloaded shares worth Rs 1,363.36 crore, according to the exchange data.

"The Rupee initially strengthened to an intraday high 74.11 supported by the strength in regional counterparts that appreciated taking cues from equities," Sriram Iyer, Senior Research Analyst at Reliance Securities, said.

The USD/INR Spot pair could trade in a range of 74.05-74.35 levels in the coming session.
PTI
first published: Aug 24, 2021 06:13 pm
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