Tuesday, Sep 17, 2019 | Last Update : 09:47 PM IST

Rupee surges 49 paise against US dollar on PM Modi's landslide win

PTI
Published : May 24, 2019, 7:30 pm IST
Updated : May 24, 2019, 7:30 pm IST

However, concerns over ongoing US-China trade tariff tussle continued to hurt forex market sentiment.

On weekly basis, the Indian currency gained 70 paise.
 On weekly basis, the Indian currency gained 70 paise.

Mumbai: The Indian rupee on Friday rallied 49 paise to close at 69.53 against the US dollar in line with a massive surge in domestic equities following a decisive mandate for Narendra Modi's BJP in the general elections.

On 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 Asian currencies.

However, concerns over ongoing US-China trade tariff tussle continued to hurt 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 Indian unit finally settled the day at 69.53, gaining 49 paise or 0.70 per cent.

Foreign institutional investors (FIIs) remained net buyers in the capital markets on Friday, buying shares worth 2,026.33 crore, according to exchange data.

"India's rupee led gains in Asian currencies as oil prices fell and equity markets surge. Sentiments have improved in domestic equity markets after continuity of the stable government. Firm equity markets would attract dollar inflow and rupee therefore would get support," V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities, said.

The Bharatiya Janata Party (BJP) has won over 300 seats on its own out of 542 seats in the Lok Sabha elections -- a first back-to-back majority for a single party since 1984.

Riding a wave of optimism, the BSE Sensex shot up 623.33 points, or 1.61 per cent, to end at 39,434.72, while the broader NSE Nifty surged 187.05 points, or 1.60 per cent, to 11,844.10.

Bond prices advanced for a third day as a retreat in oil eases concern about inflation which will give central bank comfort to cut interest rate and infuse liquidity in economy, he said.

The benchmark 10-year government bonds yield dropped 0.15 per cent to 7.23 per cent on Friday.

Meanwhile, international oil benchmark Brent Futures rose 1.18 per cent to USD 68.56 a barrel on Friday.

The weaker oil prices help currencies of major net importers of the commodity, such as India and China.

According to forex market experts, key factors that will drive investor sentiment going ahead are movement of crude, developments on trade tariff front between the US and China and the next month's RBI policy meet.

Tags: rupee, us dollar, forex, interbank foreign exchange
Location: India, Maharashtra, Mumbai (Bombay)