Indian Rupee got a boost against the US dollar amid easing geopolitical tensions and recovered some of its previous losses. At the interbank market, the value of Rupee appreciated by 50 paise settling up 0.70% at 71.46 against the US dollar.
The USD/INR exchange rate traded on Wednesday within a trading of 72.20 and 71.27.
The risk-off move that started at the end of last week has been faded after both the US and Iran are seeking a de-escalation of the situation. The US President Donald Trump said on Wednesday “the United States is ready to embrace peace with all who seek it.”
At the same time, Iran’s foreign minister, Javad Zarif, said in a tweet that “Iran took [and] concluded proportionate measures in self-defense under Article 51 of UN Charter targeting base from which cowardly armed attack against our citizens & senior officials were launched.” He also added that Iran doesn’t “seek escalation or war.”
The dollar index, which gauges the greenback’s strength against a basket of major currencies, responded positively on easing risk aversion and settled up 0.36% at 97.31. Meanwhile, oil prices got hammered on Wednesday as war drums faded. The crude oil price settled down -4.34% at 59.95, but not before touching levels not seen since 25 April.
Elsewhere, foreign institutional investors (FIIS) were net sellers of shares in the local equity market worth Rs -515.85 crore; according to the National Stock Exchange of India data published at the end of Tuesday’s trading session. On the other hand, Domestic institutional investors were net buyers of equities worth Rs 748.4 crore.
The domestic benchmark equity index NIFTY 50 settled down -0.23% at 12,025.35 on Wednesday. However, during early Asia trading hours NIFTY 50 rebounded strongly and was seen gaping higher at 12,214.20.
The Indian 10-year government bond yield was seen quoted at 6.538% in morning trade compared with its previous close of 6.557%.
Currently, one US dollar buys 71.42 rupees, down -0.06% as of 10:00 AM UTC.