The Indian rupee recovered marginally in late afternoon trade but closed lower after falling sharply in the opening session on the first trading day of the third quarter of the financial year 2017-2018.
The Indian rupee recovered marginally in late afternoon trade but closed lower after falling sharply in the opening session on the first trading day of the third quarter of the financial year 2017-2018. The domestic currency lost 21 paise to end at 65.49 per US dollar on Tuesday. During the day, the Indian rupee shuttled between 65.47-65.66 against US dollar. However, the rupee had partially recovered from its recent six-and-half month low 65.89. The plunge in the Indian rupee was due to the strengthening of the US dollar against a basket of currencies overseas.
The US dollar hit a one and a half month high overseas as US manufacturing activity in September rose to its highest level in 13 years. The rupee ended 22 paise higher at 65.28 against the dollar on Friday. The depreciation in rupee might also be due to the fall in the foreign exchange reserves. After making record highs week after week, the foreign exchange reserves dipped marginally by $262.3 million to $402.246 billion in the week, due to fall in foreign currency assets, according to the RBI data. In the previous week, the foreign exchange reserves touched a record high of $402.509 billion.
Meanwhile, Sensex and Nifty closed higher on Tuesday for the third consecutive day pushed by the robust September sales of major automakers such as Tata Motors. BSE Sensex gained 214 points to close at 31,497.38 points and NSE Nifty 71 points to finish at 9,859.5 points. The benchmark Sensex rose as much as 332 points to hit the day’s high of 31,615.28 points in the opening bell. The market participants keenly awaited the outcome of the two-day bi-monthly policy meeting of the Reserve Bank of India scheduled for tomorrow. Shares of Tata Motors were the biggest gainer on Sensex, surged 6.8% to the day’s high of Rs 428.25 before closing 3.78% up at Rs 416.4 after the automaker reported a 25% increase in domestic sales at 53,965 units in September.