BUSINESS

Rupee is now at 69.85

Gettyimages/istock

Gettyimages/istock  

Appreciates 1.1% to hit 3-month high; Sensex up 450 points

A weak dollar helped emerging market currencies to gain, with the rupee turning out to be among the best performing ones on Thursday, appreciating 1.1% against the dollar.

The rupee appreciated 78 paise to close the day at 69.85, hitting a three-month high. After depreciating about 15% in 2018, the currency has appreciated almost 5% this month, mainly on falling crude oil prices.

Lower crude oil prices will help contain the current account gap as well as inflation, as India imports 80% of its crude requirements. The dollar weakened against most major currencies after Federal Reserve Chairman Jerome Powell said that the central bank’s benchmark interest rate was likely near a “neutral level” which led to expectation of slower rate hikes, relieving pressure on emerging markets.

Softening oil prices, which slipped below $60 a barrel, over speculation about a supply glut, also helped the Indian currency to gain on Thursday. Brent crude, the international benchmark, was trading 1.04% down at $58.15 per barrel.

“The rupee remains firm on account of a sharp decline in the crude oil prices in the international market,” said Rushabh Maru — Research Analyst, Anand Rathi Shares and Stock Brokers. Mr. Maru expects the near-term range for the rupee to be between 69.50 and 71.

“Focus will now shift to India’s GDP data, RBI monetary policy meeting, OPEC meeting and outcome of State election results. These data and events will provide further discussion to the rupee,” he added.

Global cues

The rally in the rupee, in addition to firm global cues and short covering, led to the benchmark equity indices gain ground for the fourth consecutive session and close at the highest levels in nearly two months.

The 30-share Sensex gained 453.46 points, or 1.27%, to close at 36,170.41, with stocks such as Bajaj Auto, Kotak Mahindra Bank, M&M and Vedanta gaining between 3% and 5% each.

In all, 21 of the 30 stocks gained ground, as the broader market breadth just managed to stay positive. On the BSE, 1,310 stocks advanced as against 1,305 declines. The broader Nifty settled the day at 10,858.70, up 1.21%.

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