Rupee jumps 27 paise to close at 84.30 against US dollar

Mumbai, May 5 (PTI) The rupee surged 27 paise to settle at 84.30 against the US dollar on Monday, supported by a sharp decline in crude oil prices and a positive trend in domestic equities.

Robust equity inflows reflect continued foreign investor interest in Indian assets, forex traders said, adding that global uncertainties capped the rupee's gains.

At the interbank foreign exchange, the domestic unit opened at 84.45 and moved between the intra-day high of 84.10 and the low of 84.47 against the greenback. The unit ended the session at 84.30, registering a gain of 27 paise over its previous closing level.

On Friday, the rupee witnessed high volatility as it hit a seven-month high and rose past the 84 per dollar level but pared all gains to settle 3 paise lower at 84.57 against the greenback.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said sustained FII inflows continued to support the domestic currency.

"Additionally, a sharp decline in crude oil prices down over 20 per cent year-to-date has provided a further cushion, easing India's import bill and supporting macro fundamentals. Going ahead, the rupee is expected to trade in a range of 84.00 to 84.75, with continued global risk sentiment and commodity movements guiding intraday volatility," he said.

According to Dilip Parmar, Research Analyst, HDFC Securities, rupee strengthened due to persistent overseas investment in domestic stocks and renewed appetite for risk-driven assets.

"The currency also drew support from a softening US dollar and easing crude oil prices, which bolstered sentiment in both the Indian bond and rupee. Looking ahead, the USD/INR spot rate is expected to find a floor near 83.75, while upward movement may encounter resistance around the 84.95 level," Parmar said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.38 per cent at 99.64.

Brent crude, the global oil benchmark, fell 1.26 per cent to USD 60.52 per barrel in futures trade.

Forex traders said the prospect of higher supplies and weakening demand weighed heavily on crude oil prices which were already facing steep losses so far in this calendar year.

In the domestic equity market, the 30-share BSE Sensex advanced 294.85 points, or 0.37 per cent, to close at 80,796.84, while the Nifty rose 114.45 points or 0.47 per cent to settle at 24,461.15.

Foreign institutional investors (FIIs) bought equities worth Rs 2,769.81 crore on a net basis on Friday, according to exchange data.

Meanwhile, India's forex reserves increased USD 1.983 billion to USD 688.129 billion during the week ended April 25, the RBI said on Friday.

This is the eighth consecutive week of a rise in the kitty, which had jumped 8.31 billion to USD 686.145 in the previous reporting week. PTI DRR HVA

Source: PTI