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Rupee surges by 25 paise to 73.80 amid weak US dollar, positive equities

Investor risk sentiment improved after positive macro-economic data released on the domestic front, while weakness of the US currency also supported the local unit

twitter-logoBusinessToday.In | December 2, 2020 | Updated 01:32 IST
Rupee surges by 25 paise to 73.80 amid weak US dollar, positive equities
The dollar index, was down 0.05 per cent to 91.82 against a basket of six currencies

Indian rupee, the domestic currency appreciated by 25 paise to 73.80 per US dollar on Tuesday's opening session, tracking strong domestic equities and sustained foreign fund inflows.

The domestic unit opened at 73.93 per US dollar at the interbank forex market and rose by 25 paise to 73.80 over its previous close.

Forex market was closed on Monday on account of Guru Nanak Jayanti.

On Friday, currency benchmark snapped its five-day winning streak and settled 17 paise lower at 74.05 per US dollar amid subdued domestic equities and demand for the greenback from banks and importers. Every week, the rupee gained 11 paise.

Investor risk sentiment improved after positive macro-economic data released on the domestic front, while weakness of the US currency also supported the local unit. The dollar index, was down 0.05 per cent to 91.82 against a basket of six currencies.

In economic data, PMI fell to three-month low of 56.3 in November. The seasonally adjusted IHS Marki India Manufacturing Purchasing Managers' Index (PMI) highlighted a strong improvement in business conditions. However, the headline number was down from 58.9 in October to a three-month low.

Meanwhile, the National Statistical Office (NSO) released the estimates of Gross Domestic Product (GDP) in the July-September period. Provisional estimates of gross domestic product for the second quarter of the year ending in March 2021 show economic output shrank by 7.5%, following the 23.9% contraction in the first quarter.

India's eight core industries growth for October was at -2.5%. The September growth number has been revised to -0.1% from -0.8% earlier.

India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on consumer demand bouncing back.

Foreign portfolio investors (FPIs) bought shares worth Rs 7,712.98 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 4,968.90 crore in the Indian equity market on 27 November, provisional data showed. Stock markets were closed on Monday, 30 November 2020 on account of Gurunanak Jayanti.

On the domestic equity market front, market indices opened on a positive note on Tuesday, in line with global equities. Sensex gained 410 points higher to 44,559 and Nifty gained 89 points higher to 13,058.

Brent crude futures, the global oil benchmark, fell 1.22 per cent to USD 47.59 per barrel. Oil prices moved lower on uncertainty over the decision from recent OPEC+ meeting on output cuts.

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