Rupee closes almost flat at 76.14 amid border tension with China
Forex traders said the rupee traded in a narrow range as positive domestic equities and weak US currency supported the local unit, while rising coronavirus cases, border tension with China and foreign fund outflows capped the gains.
The rupee opened at 76.17 against the US dollar, and saw an intra-day high of 76.08 and a low of 76.19 against the US dollar. It finally settled at 76.14 against the US dollar, up 2 paise over its previous close.
It had settled at 76.16 against the greenback on Wednesday.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.05 per cent to 97.10.
The 30-share BSE benchmark Sensex rallied 700.13 points or 2.09 per cent to settle at 34,208.05. The broader NSE Nifty jumped 210.50 points or 2.13 per cent to 10,091.65.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 486.62 crore on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.42 per cent to USD 40.88 per barrel.
"Indian rupee ended flat against US dollar amid risk on rally after officials from both nations (India and China) sought to de-escalate tensions," said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.
At least 20 Indian Army personnel were killed in the clashes with Chinese troops in the Galwan Valley in eastern Ladakh on Monday night. China's official media has acknowledged casualties on the Chinese side without mentioning numbers.
Chinese Foreign Ministry spokesman Zhao Lijian said on Thursday that after this incident both sides are in communication and coordination on the matter through diplomatic and military channels.
Fitch Ratings' move to cut the nation's outlook to negative had little impact on the rupee, traders said.
Fitch Ratings on Thursday lowered India's outlook to negative from stable for the first time in eight years saying the coronavirus pandemic had significantly weakened the country's growth outlook for the year and exposed the challenges associated with a high public-debt burden.
"On global front, Bank of England (BoE) is likely to expand size of its borrowing programme to support the economy from the pandemics. This will further help the liquidity induced rally in risky asset classes," Vakil said.
Meanwhile, investor sentiment remained fragile amid rising coronavirus cases across the world.
The number of cases around the world linked to the disease has crossed 83.62 lakh and the death toll has topped 4.49 lakh.
In India, the death toll due to COVID-19 rose to 12,237 and the number of infections spiked to 3,66,946, according to the health ministry.
Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 76.2032 and for rupee/euro at 85.9770. The reference rate for rupee/British pound was fixed at 95.8250 and for rupee/100 Japanese yen at 71.03. DRR MR MR MR