The rupee gained 7 paise to close at 82.80 (provisional) against the U.S. dollar on Wednesday, as softening crude oil prices in the global markets boosted the local currency.
Traders said the domestic unit witnessed high volatility during the session as a strong American currency overseas and a lacklustre trend in the domestic equities dented investor sentiments.
At the interbank foreign exchange market, the local unit opened at 82.84 and touched an intra-day high of 82.80 and a low of 82.93 against the greenback.
It finally settled at 82.80, registering a rise of 7 paise over its previous close of 82.87.
The rupee remained subdued for the most part of the session on Wednesday as the strong U.S. Dollar index and sustained selling by foreign investors put downside pressure on the local unit. FIIs have remained net sellers in 7 out of the past 9 sessions with outflows of around ₹5,030 crore, Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
“We expect the rupee to trade with a slight negative bias on expectations of a strong Dollar and risk aversion in global markets. Concerns over a surge in COVID-19 cases in China and parts of South Asia may also put downside pressure on the rupee,” Mr. Choudhary said.
On the domestic equity market front, the 30-share BSE Sensex declined 17.15 points or 0.03% to end at 60,910.28, while the broader NSE Nifty fell 9.80 points or 0.05% to 18,122.50.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.11% to 104.29.
Global oil benchmark Brent crude futures fell 0.78% to $83.67 per barrel.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth ₹867.65 crore, according to exchange data.
Meanwhile, China’s reopening is raising concerns that it would fuel global inflation further.
From January, China will practically abandon its three-year-old zero Covid policy and its international isolation, fully opening its airports and ports for travel and trade amid a massive coronavirus outbreak in the country.