Rupee Gains Tracking A Broad Rally In Risk Assets, Despite Higher Oil Prices

The rupee gained early on Wednesday, tracking a broad rally in risk assets hoping for a negotiated end to the Russia-Ukraine conflict, even as oil prices climbed on supply concerns.

Most global equity markets reacted positively to Russia's promises to scale down its military operations near Kyiv and surrounding cities, though, on the ground, reports of attacks continued, with Asian shares joining that rally early on Wednesday.

Domestic bourses opened in the green on positive news from the latest peace talks in Istanbul more than a month after the most significant attack on a European nation since World War Two.

But oil prices as a fall in American crude stockpiles put the focus back on supply shocks.

Still, the rupee gained over 0.5 per cent to trade at 75.59 per dollar after opening at 75.979 against the greenback, as quoted by Reuters.

While the PTI reported the rupee opened strong at 75.65 against the US dollar at the interbank foreign exchange but lost some ground to quote at 75.69, a rise of 4 paise over the last close. It was moving in a close range of 75.69 and 75.62 in the morning trade. The rupee had settled at 75.73 against the greenback in the previous session.

The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.24 per cent to 98.20.

While a weaker US dollar helped the energy-sensitive rupee, higher crude oil prices restricted its appeal. 

Still, a reversal in capital outflows is likely for the currency to gain.

Indeed, the stock exchange data showed foreign institutional investors (FIIs) were net buyers in the capital market on Tuesday as they bought shares worth Rs 35.47 crore.