Indian rupee recovered over 20 paise against the US dollar on Friday on account of increased selling of the American currency by banks and exporters. Rupee closed 22 paise up at 66.72 against the US dollar. The local currency slipped 40 paise on Thursday and closed at fresh three-week low of 66.94 against the dollar on rising concerns over interest rate hike by the US Federal Reserve.
Meanwhile, domestic equity markets traded choppy in a narrow range and ended in green. Concern about the global economy contributed to the early weakness, while value buying at reduced levels after the drop helped the bourses in some recovery. This week has seen brutal cuts on equity markets globally as investors contend with weak China data, weak start to earnings in the US and now almost 70 per cent probability of rate hike by the Federal Reserve.
Foreign institutional investors remained net sellers in the Indian equity markes as they sold shares worth of Rs 846 crore on Friday, according to the provisional data available with NDSL.
US Dollar Index declined by 0.45 per cent in Thursday’s trading session due to unfavourable economic data from the country. However, sharp fall in the currency was cushioned due to rise in risk aversion in global markets which led to increase in demand for the low yielding currency.
US Unemployment Claims remained unchanged at 246,000 for the week ending on 7th Oct’16. Import Prices grew by 0.1 percent in September with respect to decline of 0.2 percent in August.