Markets

Rupee closes almost flat at 73.37 in lacklustre trade

Representational image.   | Photo Credit: The Hindu

The rupee slipped by 2 paise to close at 73.37 against the U.S. currency on Monday due to some dollar demand and uncertainty related to the U.S. fiscal stimulus and presidential elections.

The local unit opened at 73.38 against the U.S. dollar at the interbank forex market and moved in a narrow range of 73.35 to 73.42 in the day trade.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.17% lower at 93.52.

On the domestic equity market front, the 30-share BSE benchmark Sensex ended 448.62 points or 1.12% higher at 40,431.60. The broader NSE Nifty surged 110.60 points or 0.94% to finish at 11,873.05.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth ₹479.59 crore on a net basis on Friday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 0.44% to $42.74 per barrel.

“Rupee ended little changed on Monday as concerns of U.S. Presidential election got mostly offset by overseas fund inflows into local stocks,” said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

Mr. Trivedi further said that concerns about election outcome still persist amid rising cases of virus infection in some major parts of the world. “The range remains in band of 74.80-75.75 till the time new trigger of either stimulus announcement or U.S. election outcome reveals,” he said.

The rupee ended flat against the dollar in lacklustre trade as investors stayed away from the markets amid expectations that volatility in the local unit may rise closer to the U.S. Presidential elections, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

“Likelihood of a continued impasse over the fiscal stimulus package also kept increased uncertainty in the markets and kept investors away” Mr. Iyer added.

According to Devarsh Vakil, Deputy Head Retail Research, HDFC Securities, dollar demand from importers and central bank action weighed on rupee.

The country’s foreign exchange reserves surged by $5.867 billion to touch a record high of $551.505 billion in the week to October 9, according to the RBI data.

“The focus of the week will on Thursday’s presidential TV debate — a last chance for the President Trump to make a meaningful come back. Nancy Pelosi’s Tuesday deadline for agreeing on a meaningful fiscal stimulus may keep risk assets supported a little and add pressure on safe haven assets,” Mr. Vakil said.

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Printable version | Nov 30, 2020 4:31:20 AM | https://www.thehindu.com/business/markets/rupee-closes-almost-flat-at-7337-in-lacklustre-trade/article32894022.ece

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