Resisting pressure from higher crude oil prices, the rupee pared its early losses and closed on an almost flat note at 83.50 (provisional) against the US dollar on Thursday.
Forex traders said domestic equities witnessed a positive trend, with benchmark indices hitting all-time highs, and significant foreign fund inflows supported the rupee and stemmed the decline.
At the interbank forex market, the local unit opened at 83.52 and hit an intraday high of 83.48 and low of 83.56 against the American currency during the session.
It finally closed at 83.50 (provisional) against the dollar, which is 1 paise lower than its previous close. On Wednesday, the rupee fell by 1 paise and closed at 83.49 against the US dollar.
“We expect the rupee to trade with a slightly positive bias due to weakness in the US dollar amid weak economic data and increased risk appetite in global markets,” said Anuj Chaudhary, research analyst at Sharekhan by BNP Paribas.
Global oil benchmark Brent crude futures were trading 0.47 percent lower at US$86.93 per barrel.
In the domestic equity market, Sensex crossed the historic 80,000 mark and Nifty hit a new lifetime high. The 30-share BSE Sensex ended the day at its all-time high of 80,049.67, up 62.87 points or 0.08 percent. The broader NSE Nifty closed at a new peak of 24,302.15, up 15.65 points or 0.06 percent.
Foreign institutional investors (FIIs) were net buyers in the capital market on Wednesday as they bought shares worth Rs 5,483.63 crore, according to exchange data.
Meanwhile, according to an official at S&P Global Ratings, a sovereign rating upgrade is possible for India in the next 24 months if the central government is able to manage its finances prudently and bring the fiscal deficit down to 4 percent of GDP.
Yiphern Phua, director, sovereign ratings, S&P Global Ratings, said the trigger for an upgrade would be for the government (centre + states) deficit to fall below 7 percent of GDP, and the majority of this would have to be driven by the central government.
