The Indian rupee on Wednesday clocked its third straight session gains, rising 17 paise to close at a fresh two-month high of 69.54 against the US dollar on sustained foreign fund flows. Besides, the US dollar’s weakness against its key rivals overseas strengthened forex market sentiment domestically.
At the Interbank Foreign Exchange, the domestic unit opened at 69.71 and advanced to a high of 69.42 during the day. It finally settled at 69.54, a rise of 17 paise against the dollar. This was the best closing level for the Indian unit since January 1 this year, as it ended that day at 69.43.
Meanwhile, the rupee has gathered 60 paise in the last three sessions. The dollar index, which gauges the greenback’s strength against a basket of six currencies, was lower by 0.08 per cent at 96.85. A continuous rise in global crude oil prices kept rupee under some pressure, restricting its gains.
The Brent crude futures, the global benchmark, rose 0.67 per cent to quote at 67.12 a barrel on Wednesday. The rise in oil prices has been supported by planned cuts to Saudi exports and a reduced forecast for US crude output.
The Indian currency has been riding high on massive liquidity push in form of strong foreign fund inflows in March. Foreign institutional investors (FIIs) have poured in more than Rs 10,000 crore in Indian stocks so far this month. Foreign investors further invested a net amount of Rs 2,722.28 crore on Wednesday, as per provisional data.
“Indian rupee continues its upward journey for the third session backed by strong foreign fund flows and weaker greenback against a basket of six currencies. Apart from the secondary market inflows, government’s CPSE and MSTC stake sell related fund expected in coming week...,” V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities, said.
Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee against the dollar at 69.6225 and against euro at 78.5709. The reference rate for the rupee against the British pound was fixed at 91.1535 and against 100 Japanese yen at 62.55.
In line rupee rise, Indian equities Wednesday continued their unabated rally for a third day in a row, with the Sensex and the Nifty logging gains led mainly by banking and energy stocks. The 30-share BSE index ended 216.51 points, or 0.58 per cent, higher at 37,752.17. The broader NSE Nifty closed with gains of 40.50 points, or 0.36 per cent, at 11,341.70.
However, global investors remained jittery over uncertainties around Brexit developments. British Prime Minister Theresa May has suffered yet another crushing Parliament defeat over Brexit when MPs overwhelmingly rejected her plan to quit the EU, plunging the UK into a further period of political uncertainty just 17 days before its divorce from the bloc.