Rupee pares initial gains, settles flat at 74.75 against US dollar

The rupee pared its initial gains and settled on a flat note at 74.75 against the US dollar on Thursday as escalating tensions between the US and China weighed on investor sentiment.

At the interbank forex market, the domestic unit opened on a strong note at 74.65, but erased the gains and finally closed at 74.75, unchanged from its previous closing.

During the session, the domestic unit witnessed an intra-day high of 74.52 and a low of 74.87 against the US dollar.

Forex traders said the uptick in the rupee during the day was supported by weak greenback, foreign fund inflows and positive domestic equities, but rising tensions between the US and China weighed on investor sentiment and restricted the gains.

US President Donald Trump has said that closure of more Chinese embassies was “possible”.

The US does not rule out the possibility of closing more Chinese diplomatic missions in the country, Trump said, hours after Washington ordered the closure of Beijing's consulate in Houston to "protect American intellectual property and private information".

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.08 percent to 94.91.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 271.46 points higher at 38,142.98 and broader NSE Nifty rose 85.15 points to 11,217.75.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,665.57 crore on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, surged 0.65 percent to $44.58 per barrel.