Indian rupee banknotes and coins are arranged for a photograph in Mumbai, India. (Photographer: Adeel Halim/Bloomberg)

Rupee Rises To Over Two-Month High

The rupee on Tuesday gained 18 paise to close at more than a two-month high of 69.71 against the U.S. dollar propelled by foreign capital inflows and a weaker greenback in overseas markets.

Dollar selling by exporters and banks also supported the domestic currency, forex dealers said. Foreign investors continued to pour in capital into Indian markets amid growing risk appetite for riskier assets.

Foreign portfolio investors put in Rs 2,477 crore on a net basis in capital markets, according to provisional exchange data. They had invested a net Rs 3,810.60 crore on Monday.

“Rupee gains for a second day as risk-on sentiment boosts hopes of more inflows into the domestic equity and debt market. The benchmark BSE Sensex closed at five-month high with a gain of 1.30 percent,” VK Sharma, head PCG and capital markets strategy at HDFC Securities, said.

Also read: Sensex Ends 481 Points Higher; Nifty Clocks Best Two-Day Rally In Nearly Five Months

The U.S. dollar index—a measure of the greenback's strength against a basket of major global currencies—was lower by 0.17 percent at 97.012.

The British pound rose against the dollar after British Prime Minister Theresa May struck a revision to the Brexit deal that she expects would sail through Parliament.

At the Interbank Foreign Exchange, the rupee opened at 69.75 and advanced 39 paise to 69.50 on strong gains in equity markets. Later, it trimmed some of the gains to end up by 18 paise or 0.25 percent at 69.71, the highest closing level since Jan. 1. The rupee had gained 27 paise on Monday.

The 30-share BSE index settled 481.56 points, or 1.30 percent, higher at 37,535.66. The broader NSE Nifty reclaimed the psychological 11,300-level and closed with gains of 133.15 points, or 1.19 percent, at 11,301.20.

Analysts said that foreign funds poured money in domestic equity market by pricing in second term for the incumbent National Democratic Alliance government.

Meanwhile, Brent crude, the global oil benchmark, rose 23 cents to $66.81 per barrel on account of healthy demand and output cuts led by producer group OPEC.

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