Rupee recovers from record lows to end 7 paise higher at 77.47 against dollar
The rupee on Tuesday recovered from its all-time intra day low of 77.79 to close higher by 7 paise on a stellar rally in domestic stock markets.
After opening lower at 77.67, the local unit plunged further to its all-time intra-day low of 77.79 due to a spike in crude oil prices and disappointing macroeconomic data.
However, a strong rally in domestic equities helped the rupee rebound and close at 77.48 (provisional), showing net gains of 7 paise over the last close of 77.55. The forex market was closed on Monday on the account of Buddha Purnima.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.41 per cent to 103.75.
Brent crude futures, the global oil benchmark, surged 0.74 per cent to USD 115.09 per barrel.
"The Indian rupee depreciated on Tuesday on a surge in crude oil prices and disappointing macroeconomic data. However, soft tone in the US Dollar and risk-on sentiments in global markets have cushioned the downside," said Praveen Singh, AVP- Fundamental currencies and Commodities analyst, Sharekhan by BNP Paribas.
Wholesale price-based inflation soared to a record high of 15.08 per cent in April mainly on account of spiralling prices of food, fuel and other commodities, which may prompt the Reserve Bank to hike interest rates in upcoming monetary policy review next month.
Dollar declined on positive undertone in the risk assets and weak economic data.
"However, overall shaky risk sentiments and concerns over global economic recovery may cap sharp upside. Tensions due to the Ukraine war may also weigh on the Rupee," Singh said, adding that the rupee may trade in the range of 76.80-78.30 in the next couple of sessions.
The commerce ministry on Friday said India's merchandise exports surged 30.7 per cent to USD 40.19 billion in April on account of healthy performance by sectors like petroleum products, electronic goods and chemicals, even as the trade deficit widened to USD 20.11 billion during the month.
On the domestic equity market front, the BSE Sensex ended 1,344.63 points or 2.54 per cent higher at 54,318.47, while the broader NSE Nifty jumped 417.00 points or 2.63 per cent to 16,259.30.
Foreign institutional investors remained net sellers in the capital market on Monday as they offloaded shares worth Rs 1,788.93 crore, as per stock exchange data.