Amid sustained capital inflows and fresh dollar selling by exports help rupee to gain the most in two week. The domestic currency recovered sharply by 60 paise to Rs61.23 per dollar. The rupee had its biggest gain after US lawmakers reached a deal to end the government shutdown and temporarily avoid a debt default.
Earlier on October 3, rupee had gained 73 paise to Rs 61.73 per dollar. The dollar index, consisting of six major global rivals, was also down by 0.80 per cent which also helped rupee to recover.
“The rupee was seen trading on a stronger note against the US dollar as last-minute deal in the US helped uplift the sentiments in the global markets. The dollar was seen weakening and if it does not show a sustained recovery in the coming few days, then we might see rupee continuing with its gains,” said Abhishek Goenka, CEO of India Forex Advisors.
He also added that after Standard & Poor estimate that the US GDP may fall by 0.6 per cent in the fourth quarter, there is a strong believes that the Federal Reserve might continue their stimulus programme up to even March.
While the currency should strong bounce back, the Indian stock markets registered the biggest fall for October. On Thursday, markets retracted from almost their three year high due to heavy profit booking done by investors. The benchmark Sensex fell 132.11 points to 20,415.51 and the broader index, Nifty lost 43.20 points and closed at 6,045.85.
Dragged down by information technology (IT) stocks, Sensex registered its biggest fall in this month. As per experts, the markets fell as investors booked their profits in the information technology sector. IT index crashed by 3.59 per cent followed by technology and capital goods indices which fell 2.61 per cent and 2.30 per cent respectively.
On the other hand, consumer goods index continued to rise and closed after rising 1.71 per cent. Both, oil & gas and FMCG indices also saw fresh buying and closed with gains above 1.15 per cent. While domestic investors sold shares of net Rs1,149.22 crore, the foreign institutional investors (FIIs) continued to invest in Indian markets. As per the provisional data provided by the stock exchanges, FIIs bought shares worth Rs1,109.93 crore. Overall, the market breadth remained negative as 1,248 shares ended with losses, 1,209 shares closed with gains and 151 ruled steady.