The rupee strengthened by three paise against the US dollar on Wednesday, December 9, and settled at 73.57 (provisional), supported by heavy buying in domestic equities and foreign fund inflows. At the interbank foreign exchange market, the local unit opened at 73.58 against the dollar and registered an intra-day high of 73.49. It witnessed a low of 73.61. In an early trade session, the local unit surged by 11 paise to 73.49 against the dollar. Closing at 73.57 against the American currency, the rupee recorded a rise of three paise over its previous close. On Tuesday, December 8, the domestic unit surged by 30 paise and closed at a one-and-a-half month high of 73.60 against the greenback.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 0.24 per cent down at 90.74. According to traders, the weakening of the American currency in the overseas market also supported the local unit.
"Globally, market sentiments are improving as traders take cues from positive news on COVID-19 vaccines and ongoing efforts to launch more fiscal stimulus. In order to thwart a deep and elongated recession, worldwide lawmakers have released a barrier of monetary and fiscal stimulus as the coronavirus sealed international borders and also resulted in leading millions unemployed,'' said Mr. Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services.
''For the coming sessions, we expect USDINR spot to trade in between 73.25-74.0. Only a consistent trading above 74.0 will push prices higher towards 74.20, with 73.50-73.25 being the strong support zone,'' he added. According to provisional exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,909.60 crore on December 8.
On the domestic equity market front, the BSE Sensex ended at 494.99 points or 1.09 per cent higher at 46,103.50, while the NSE Nifty climbed 136.15 points or 1.02 per cent to 13,529.10.
“Nifty continues to scale new highs as it has gained nearly 2 percent in the previous week. We continue to believe in the positive undertone of the markets over the medium term; for the short term there is a possibility of consolidation/correction. Immediate support is seen at 13100 with buying on dips advisable for the near term. IT stocks look attractive at current levels while Metals and Banking should be accumulated only on meaningful corrections,'' said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities.
Brent crude futures, the global oil benchmark, increased by 1.06 per cent to $ 49.36 per barrel.