India’s Rupee dips lower adding more losses in 2020 despite a boost in the manufacturing sector activity to a 7-month high. At the interbank market, the value of Rupee closed unchanged from the previous closing rate and settled at 71.21 (New York based closing price) against the US dollar.
During the early Asia trading hours, the USD/INR exchange rate was seen quoted within a range of 71.21 – 71.73.
India’s manufacturing sector as measured by Markit Manufacturing PMI rose in December to 52.7 compared to 51.2 in November. Any reading above the 50 mark indicates expansion in the manufacturing sector. The sudden rebound comes after in October 2019 India’s manufacturing growth slipped to its lowest performance in two years.
The official data released on Thursday revealed that new orders were the main driver behind the boost as factories ramped up production to a 10-month high. Additionally, as per the survey, the growth was also supported by higher overseas demand. Export orders only grew moderately tracking the positive trend in the new export order for the 26th consecutive month.
The dollar index traded higher and settled up 0.38% at 96.81. After an awful end of the year sell off, the greenback is trying to make a comeback.
Elsewhere, foreign institutional investors (FIIS) were net buyers of shares in the local equity market worth Rs 688.76 crore; according to the National Stock Exchange of India data published at the end of Thursday’s trading session. At the same time Domestic institutional investors were net buyers, investing Rs 63.95 crore.
In other news, the domestic benchmark equity index NIFTY 50 reversed the losses on the first trading day of 2020 and settled at 12,282 near the all-time high established in December. However, during early Asian trading hours NIFTY 50 was seen quoted lower around the 12,213 level tracking the weakness in the Asia equity market.
The Indian 10-year government bond yield was seen quoted unchanged at 6.50% in morning trade compared with its previous close of 6.50%.
