Falling to nearly nine-month lows, the rupee on Tuesday closed just shy of 56-level against the dollar after it slumped by 39 paise to end at 55.96, weighed down by month-end demand for the US currency from importers and defence-related purchases.
The dollar strengthening against major currencies overseas also put pressure on the rupee which struggled to recover despite over $125 million inflows coming into domestic stocks, forex dealers said.
At the Interbank Foreign Exchange (Forex) market, the domestic currency commenced weak at 55.68 a dollar from yesterday’s close of 55.57 against the dollar.
However, it later recovered to a high of 55.64 but failed to sustain the momentum and dropped to a low of 55.99, on heavy dollar demand from importers, mainly oil refiners to meet their month end requirements, before concluding at 55.96, a fall of 0.39 paise, or 0.70 per cent.
The rupee had risen yesterday after a six-day long losing streak, in which it had hit 56.01 last Thursday. This was rupee’s lowest level since September, 2012.
“The rupee’s fall today was not due to any fundamental reason as such. Some short-term dollar demand due to month end and defence-related purchases pulled it down. Also concerns of GDP numbers, which will be announced later this week, falling below market expectations also hit the currency,” said K Hariharan, Treasurer at First Rand Bank.
The dollar index was up by 0.06 per cent against a basket of six major currencies.
“The trading range for the USD/INR pair is expected to be within 55.75 to 56.25,” Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said.
Sensex up 130 pts; RIl, CIl Hero in limelight
Continuing its upward march for the third day Sensex on Tuesday jumped by 130 points to close at one-week high of 20,160.82 and the NSE Nifty regained the crucial 6,100-level on heavy buying in RIl, Coal India, Hero MotoCorp and ITC shares.
The 30-share index, which had gained 356 points in the last two trading sessions, saw volatile trading but advanced by 130.05 points, or 0.65 per cent to close at 20,160.82. This is Sensex’s highest closest since 20,223.98 on May 20.
The 50-share National Stock Exchange index Nifty regained the key 6,100 level after a gap of nearly a week by rising 28.10 points, or 0.46 per cent, to 6,111.25. Also, the MCX-SX flagship index SX40 closed higher by 51.64 points, or 0.43 per cent, at 11,947.27.
Hero MotoCorp was the star performer of the day rising over 5 per cent on BSE ahead of monthly sales report. Coal India ltd (CIl) shares rose over 3 per cent on robust earnings and first price hike in two years. RIl, which attracted buyers for the second day on new gas find, jumped nearly 2 per cent.
Other Sensex heavyweights like ITC, ICICI Bank, ONGC and TCS rose in 1-2 per cent range.
“This week has started with recovery from lower levels and Nifty is once again above 6,100 level and Sensex above 20,000 level -- psychologically important for confirming further uptrend,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio limited.
In sector-wise indices, BSE Oil and Gas sector index gained the most by rising 1.65 per cent to 8,950.96, followed by auto index by 1.33 per cent to 11,076.54.
GAIl ended marginally higher after Q4 profit rose 28 per cent. Outside broader indices, earnings-related action was seen in Havells India which touched a new high, CESC rose over 2 per cent, Colgate (1.2 pc) and Tata Global (0.77 pc).
Meanwhile, Muthoot and Manappuram ended lower after RBI imposed fresh restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs etc.
AstraZeneca Pharma India slumped over 16 per cent after the company intimated floor price for OFS at a substantial discount to the prevalent market price.