BackRupee closes at 62.54 per dollar as stock market bounces back
A recovery in the local stock market and consistent inflow of dollars from foreign institutional investors help
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Mumbai: The rupee recouped losses against the dollar, tracking a recovery in the local stock market amid consistent inflow of dollars from foreign institutional investors (FIIs).
After opening at 62.81 a dollar, down from Monday’s close of 62.57, the Indian currency gained on consistent dollar sales. The domestic currency closed at 62.54 per dollar, up 0.06%, from the previous close of 62.575. Earlier, the unit had touched a low of 62.82 per dollar.
“There has been inflows most likely from portfolio investors because the feeling is that India is much better prepared than other emerging markets in case of an increase in risk aversion globally," said Ashtosh Raina, head of foreign exchange at HDFC Bank Ltd.
The rupee had opened lower on Tuesday, tracking the losses in the US equity market after the S&P 500 lost 2.3% overnight in its worst session since June, triggered by the ISM manufacturing index falling steeply to its weakest level in eight months, from 56.5 to 51.3.
The Dow Jones Industrial Average dropped 2.1% and Nasdaq Composite plunged 2.6%.
The drop in equities in the US also had its impact in the Indian stock market with the Sensex touching an intra-day low of 19,963.10, down 1.22%, or 246.14 points from previous close.
However, local stocks recovered to close at 20,211.93 points, up 0.01%.
The yield on India’s 10-year benchmark bond ended at 8.68% as compared with its previous close of 8.74%. It opened at 8.74% and touched a high and a low of 8.74% and 8.68%, respectively.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 81.09, UP 0.11% from the previous close of 81.01.
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