India’s Rupee stages a relief rally against the greenback following a four consecutive days of losses. At the foreign exchange market, the value of Rupee appreciated by 16 paise settling up 0.22% at 71.04 against the US dollar. However, the USD/INR exchange rate was seen trading on Wednesday within a trading range of 71.20 and 71.01.
However, early Asia trading hours has seen the INR giving back most of its gains.
Experts attribute the Rupee’s strength due to modest rebound in the risk sentiment as fears over the China’s coronavirus outbreak faded away. The initial market response knocked off the global stock indices from their record peaks, but the US stock market stabilized near the all-time high. On the other hand, the Asian peers were left behind on a soft note.
Compared to other Asian currencies, the INR had a relatively low performance in the past 12-months. The Indian Rupee is down 2% against the greenback amid a combination of low economic growth and higher inflation. After the IMF downgraded the economic growth in India to 4.8% in 2019 another rating agency slashed its GDP forecast for the third-largest economy in Asia. The India Ratings and Research forecasted an economic growth of 5.5% in the fiscal year 2020-2021.
The dollar index, which gauges the greenback’s strength against a basket of major currencies, was seen quote slightly lower settling at 97.51.
Elsewhere, foreign institutional investors (FIIS) were net sellers of shares in the local equity market worth Rs -176.43 crore; according to the National Stock Exchange of India data published at the end of Monday’s trading session. At the same time, Domestic Institutional Investors (DIIs) were net sellers of equities worth Rs -326.22 crore.
The domestic benchmark equity index NIFTY 50 inched lower for the third consecutive days on Wednesday and settled down -0.52% at 12,106.90. However, during early Asia trading hours on Thursday, NIFTY 50 stabilized and traded slightly higher at 12,173.65, ending a 3 day streak of losses.
The Indian 10-year government bond yield was seen quoted at 6.62% in morning trade compared with its previous close of 6.64%.
At the currency market, one US dollar buys 71.19 Rupees, up 0.21% as of 8:00 AM UTC.