According to forex market experts, key factors that will drive the investor sentiment going ahead are movement of crude, developments on the trade tariff front between the US and China and the next month's RBI policy meet.
The rupee on Friday closed at 69.52 against the dollar, gaining 50 paise over Thursday’s closing of 70.02, with crude oil prices easing slightly and foreign portfolio investors (FPI) buying equities. The rupee’s rise was in line with a massive surge in domestic equities following a decisive mandate for the BJP in the general elections.
FPIs invested $500 million in the past four trading sessions till May 23 in the Indian equity markets on the back of an outflow of $850 million in the previous five sessions. Provisional data showed that FPIs invested $290 million in equity markets on Friday.
On a weekly basis, the Indian currency gained 70 paise, helped by a host of domestic and global factors like stable political outlook with NDA government’s return, sustained fund inflows, lower crude oil prices and strengthening of Asian currencies.
However, concerns over ongoing US-China trade tariff tussle continued to hurt the forex market sentiment.
At the interbank foreign exchange, the rupee opened at 69.75 against the previous close of 70.02. It traded in the range of 69.81 to 69.50 during the day. The unit finally settled at 69.53, gaining 49 paise or 0.70%.Brent crude prices have been decreasing for the past four trading sessions – it eased to $68.52 per barrel (bbl) on Friday from $72.18 per barrel on May 21.
“With such a mandate we can expect the government would be self sufficient in making reforms regarding the ongoing issues, like in NBFCs,” said Ananth Narayan, associate professor of finance at SP Jain Institute of Management an Research. The Reserve Bank of India could intervene and buy dollar which would strengthen the rupee to Rs 68 against the dollar, he added.
The most traded bond — 7.17% yielding paper maturing in 2028 – closed Friday’s session at 7.22%, one basis point lower than the previous close.
According to forex market experts, key factors that will drive the investor sentiment going ahead are movement of crude, developments on the trade tariff front between the US and China and the next month’s RBI policy meet.
(With PTI inputs)