The Indian rupee extended rally for the third straight session on Wednesday, rising as much as 5 paise to 69.67 against the US dollar in opening trade amid fresh fund infusion by foreign investors and positive trading across domestic equity markets.
Trader sentiment has improved after exit poll results predicted a clear majority for the BJP-led National Democratic Alliance (NDA) government. The final result of general election will be out on 23 May.
At the Interbank Foreign Exchange market, the domestic currency was trading at 69.69 against the US dollar, up 0.06 per cent, against its previous close of 69.72 at 9:15 am. The local currency opened higher at 69.70 in line with Indian benchmarks, Sensex and Nifty.
However, a strong US dollar against a basket of other Asian currencies restricted rupee's upward move.
According to market experts, rupee is likely to move in a narrow range ahead of the general election results. The forex market will see rangebound trade ahead of the release of minutes from the Federal Reserve policy meeting and a speech by European Central Bank President Mario Draghi.
Today, USD-INR pair is expected to quote in the range of 69.40 and 70.05, Moneycontrol quoted Motilal Oswal as saying. Volatility in the rupee could be confined to a narrow range in the first half of the trade, but could rise in the second half, it added.
As on May 21, the foreign institutional investors stood as net buyer in equity market, but turned net seller in debt amrket. Gross equity purchased stood at Rs 7,521.24 crore and gross debt purchased stood at Rs 808.34 crore, while the gross equity sold stood at Rs 5,914.43 crore and gross debt sold stood at Rs 820.78 crore. Therefore, the net investment of equity and debt reported were Rs 1,606.81 crore and Rs -12.44 crore, respectively.
Meanwhile, crude oil prices edged lower by 0.55 per cent to 71.78 per barrel on Wednesday as investors turned caution ahead of weekly data on domestic oil inventories. The decline came after Brent Crude surged to USD 73/bbl on Tuesday.
Edited by Chitranjan Kumar