Rupee strengthens to 60.08 on dovish policy outlook from the U.S. Federal Reserve
While stock markets were subdued due to the mounting pressure on global economies, following worsening geo-political situation in Iraq, the rupee gained on Thursday on the back of dovish policy outlook from the U.S. Federal Reserve.
The rupee strengthened to 60.08 a dollar at close compared to its previous close of 60.39.
On the bourses, the S&P BSE Sensex closed at 25201.80 with a loss of 44.45 points. On the National Stock Exchange (NSE), the 50-share Nifty lost 17.50 points to close at 7540.70.
“Nifty was consolidating since last few days at around 7500 levels and a break below this can cause further more sell-off. Global market outlook and strong rupee supported the market to a greater extent,” said Alex Mathews, Head Research, Geojit BNP Paribas Financial Services Ltd. “Today we saw heavy selling in oil-related stocks due to intensified tensions in Iraq, which can lift Nymex crude prices towards $113 a barrel. If crude rises beyond this level then we can expect higher inflationary trends,” Mr. Mathews added.
“On Thursday, the domestic bourses were seen reacting positively to the dovish statement made by the U.S. Federal Reserve. But as the day progressed, negativity on the global front, due to Iraq turmoil, dragged our markets down. In the end, it closed slightly in the red with market breadth on the declining side,” said Jayant Manglik, President-retail distribution, Religare Securities Limited.
“The rupee is now trading around 60 against the dollar. In the near-term, the pair is expected to remain volatile within a broad range of 59.75/80 and 60.40/50 levels on spot,” said Mr. Banerjee.