Rupee recovers from historic low, opens 25 paise higher at 83.84
The rupee sells in good times and bad. Image: Bloomberg
The rupee recovered from its all-time low to open 25 paise higher at 83.84 against the US dollar on Tuesday morning, reflecting a recovery in the domestic equity market even as foreign banks put pressure on the local unit through aggressive dollar bids.
Forex traders said risk-averse attitude in global markets, escalation of geopolitical tensions in the Middle East and foreign investor outflows further dampened investor sentiment.
At the interbank forex market, the local unit opened at 83.92 and subsequently touched an early peak of 83.84, up 25 paise from its all-time low of 84.09 against the US currency.
On Monday, the rupee fell 37 paise to close at a historic low of 84.09 against the US dollar.
“The rupee is being sold in good times and bad, indicating demand for the US dollar as foreign investors pull out of the Indian equity market amid concerns over high valuation,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.16 percent to 102.85 points.
Brent crude, the global benchmark for oil, was trading at $77.15 a barrel on the futures market. Fears of a growing conflict in the Middle East that could affect supplies outweighed fears of a potential U.S. recession that could hurt demand in the world’s largest oil consumer.
In addition, Israel and the US are preparing for a significant escalation after Iran and Hamas vowed to take revenge on Israel for last week’s killing of a Hamas leader, traders said.
In the domestic equity market, the 30-share BSE Sensex rose 903.63 points, or 1.15 percent, to 79,663.03, while the Nifty rose 270.50 points, or 1.12 percent, to 24,326.10.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 10,073.75 crore, stock market data showed.
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First print: Aug 6, 2024 | 10:44 AM IST