The rupee recovered by 15 paise against the US dollar on Wednesday, October 13, to settle at 75.37 (provisional) tracking a rally in domestic equities and weaker American currency in the global markets. At the interbank foreign exchange market, the local unit opened strong at 75.29 against the dollar and swung between 75.19 and 75.51. In an early trade session, the domestic unit rose 26 paise to 75.26 against the greenback.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, dropped 0.27 per cent to 94.26. According to forex dealers, lower crude prices also supported the rupee sentiment.
What analysts say:
Mr Amit Pabari, MD, CR Forex:
”After making a low of 75.16 yesterday, the USDINR pair jumped sharply higher towards 75.66; recovered by 50 paise from the bottom amid a strong recovery in the crude oil from the bottom. This might have pressurized importers to hedge their short-term payable. Further, carry traders who were having long bets on rupee over a year due to lower volatility and higher return are now unwinding their positions.
If the USDINR pair make any constructive move above this zone on a weekly closing basis, then one could expect further upside towards the 76.00 level over the short term and 76.50-77.00 over the medium term. However, RBI-who doesn’t need any approval to intervene, can jump in the market anytime and start a rescue operation. Thus, it is a ‘make or break situation’ for the USDINR pair.”
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Limited:
”USDINR spot closed 14 paise lower on the back of lumpy corporate inflows. At the same time, pullback in US bond yields and oil prices and a rally in stock markets kept a cap on USDINR. Tonight focus will be on US CPI and US FOMC minutes. Bias continues to be upward and the expected range can be 74.90 to 75.70 levels on spot.”
Domestic Equity Markets Today:
After scaling a record peak of 60,836.63 during the session, the BSE Sensex settled 452.74 points or 0.75 per cent higher at 60,737.05, taking its winning streak to the fifth consecutive day. Similarly, the Nifty rallied 169.80 points or 0.94 per cent to 18,161.75 – touching an intra-day record of 18,197.80.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
”Markets witnessed a stellar rally as both Sensex and Nifty scaled to fresh record highs, largely dominated by Auto and IT stocks. Benchmark Nifty maintained a strong breakout continuation formation which clearly suggests further uptrend from current levels.
We are of the view that the short-term chart formation is still on the long side but due to an overstretched intraday rally, the bulls may take a caution stance between 18250-18275 levels. For day traders, 18100 would act as a key support level. Above the same, the uptrend wave will continue up to 18200-18275 levels.”
According to exchange data, the foreign institutional investors were net sellers in the capital market on October 12 as they offloaded shares worth Rs 278.32 crore. Brent crude futures, the global oil benchmark, declined 0.40 per cent to $ 83.09 per barrel.
Waiting For A Big SCOOP