Brent crude futures, the global oil benchmark, tumbled 1.62 per cent to USD 60.31 per barrel.
Rebounding from six-month lows, the rupee advanced 13 paise to close at 71.27 against the US dollar on Wednesday amid easing oil prices and gains in the domestic equity market. Forex traders said the US delaying new tariffs on Chinese electronics goods as well as encouraging macroeconomic data also boosted investor sentiment. At the interbank foreign exchange market, the Indian unit opened strong at 71.00 and rose to the day’s high of 70.85. It touched an intra-day low of 71.35, before finally ending at 71.27, higher by 13 paise from its previous close.
On Tuesday, the rupee had plunged 62 paise to close at a nearly six-month low of 71.40 against the US dollar as global market turmoil and Argentine currency crash drove investors to safe havens. “The Indian rupee has now become Asia’s worst performing currency so far this month, Chinese yuan depreciated amid trade worries and foreign investor outflows,” said V K Sharma, Head-PCG & Capital Market Strategy, HDFC Securities.
Positive macroeconomic data also supported the domestic unit. While retail inflation eased marginally to 3.15 per cent in July, wholesale inflation fell to a two-and-half-year low of 1.08 per cent, government data showed. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 638.28 crore on Tuesday, according to provisional exchange data. Brent crude futures, the global oil benchmark, tumbled 1.62 per cent to USD 60.31 per barrel.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 97.82, up 0.01 per cent. Meanwhile, the 10-year government bond yield was at 6.63 per cent on Wednesday. “The 10-year bond yields rose by 10 basis points…inflation remains under RBI’s mandate of 4 per cent for the 12 month in row,” Sharma said. On the domestic market front, the 30-share BSE Sensex settled 353.37 points or 0.96 per cent higher at 37,311.53. Similarly, the broader NSE Nifty reclaimed the 11,000 mark, jumping 103.55 points or 0.95 per cent to 11,029.40. Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.2365 and for rupee/euro at 79.7557. The reference rate for rupee/British pound was fixed at 85.8939 and for rupee/100 Japanese yen at 67.66.