The rupee strengthened by 34 paise to close at 81.86 (provisional) against the American currency on Friday, led by a jump in domestic equities and a fall in crude oil prices.
At the interbank forex market, the local unit opened at 82.15 against the American currency and finally closed at 81.86 against the greenback, registering a gain of 34 paise over its previous close of 82.20.
The rupee also touched a low of 82.31 against the dollar during the trading session.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.12% to 101.63.
Global oil benchmark Brent crude futures rose 0.39% to $82.49 a barrel.
Anuj Chowdhary, Research Analyst, Sharekhan by BNP Paribas said, “Rise in domestic equities and weakness in crude oil prices supported the Indian rupee.
Mr. Chaudhary further said that the rupee depreciated earlier today due to disappointing PMI data. India’s services PMI fell to 57.2 in January from 58.5 in December, while the overall PMI fell to 57.5 from 59.4 during the same period.
“We expect the rupee to trade with a slight positive bias as buoyancy in domestic equities could lead to fresh foreign inflows,” said Mr. Chowdhary. Fall in crude oil prices and dovish Fed’s weak dollar pushed the rupee lower. But support can be found.”
Market participants may remain cautious ahead of non-farm payrolls and ISM services PMI data from the US, while payroll data is expected to show a slowdown in the pace of job growth, services PMI is expected to show a move into expansion territory of the sector Mr. Chowdhary added.
On the domestic equity market front, the 30-share BSE Sensex advanced 909.64 points or 1.52% to close at 60,841.88, while the broader NSE Nifty advanced 243.65 points or 1.38% to 17,854.05.
Foreign institutional investors (FIIs) were net sellers in the capital market on Thursday as they sold shares worth ₹3,065.35 crore, according to exchange data.