Dollar gains against other currencies overseas also put pressure on the Indian rupee.
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In global markets, the dollar declined against key rivals in early trade as investors weighed the prospects for a continuation of monetary stimulus from the US Federal Reserve.
The Indian rupee on Wednesday ended unchanged against the US dollar at 61.41 ahead of the outcome of US Federal Reserve's policy meeting.
Jet fuel prices on Monday were hiked by a steep 5.3 per cent - the tenth straight increase this year -- to an all-time high, in line with a surge in global energy prices. The price of aviation turbine fuel (ATF) -- the fuel that helps aeroplanes fly -- was hiked by Rs 6,188.25 per kilolitre, or 5.29 per cent, to Rs 1,23,039.71 per kl (Rs 123 per litre) in the national capital, according to a price notification of state-owned fuel retailers. This is the 10th straight increase in jet fuel prices this year.
The rupee on Tuesday tumbled by 32 paise to close at 64.17 on fresh dollar demand from importers.
Top performers were PowerGrid, ONGC, Ultratech Cement, Asian Paint, Kotak Bank and Titan. Nifty settled with a gain of 232.40 points at 14,761.55.
Economists and experts have suggested that the central bank should intervene in the Indian forex market to halt the sharp depreciation in rupee value.
Risk management is too technical and dynamic a field to lend itself to decision-making by a committee. It needs to be run by professionals with a clear mandate and accountability, says Jamal Mecklai.
Persistent dollar demand from banks and importers on the back of a higher dollar in the New York market mainly affected the rupee.
Overseas, the US dollar took a breather against basket currencies
The rupee on Thursday surged by 22 paise to close at a fresh three-week high of 61.75 against the US currency.
Deutsche Bank on Monday completed the first forex option transaction in India. The transaction, which was a 6-month dollar/rupee risk reversal, was inked by Deutsche Bank for Reliance in Mumbai, an official release said.
The Reserve Bank's rate-setting panel will start its 3-day deliberations on Wednesday amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Based on the recommendations of the Monetary Policy Committee (MPC), the RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.
The rupee settled at 61.71. In straight three sessions, the currency has shot up 51 paise or by 0.82 per cent.
PowerGrid was the top gainer in the Sensex pack, surging over 4 per cent, followed by Bharti Airtel, Tata Steel, NTPC, HDFC Bank, UltraTech Cement and Kotak Bank. On the other hand, TCS, Nestle India, Reliance Industries and HCL Tech were among the laggards.
All markets will remain closed on Monday, April 14, on account of Dr Baba Saheb Ambedkar Jayanti.
Strengthening of dollar against the Euro also put pressure on the local unit
For the month as a whole, rupee depreciated 6.34 per cent in May.
In fairly active trade at the Interbank Foreign Exchange (forex) market, the local currency resumed firm at 39.32/34 a dollar from yesterday's close of 39.44/45 a dollar and later surge to 39.31 level on the back of heavy capital inflows into equity.
The RBI, however, asked the government to carefully assess the pros and cons of such action.
The rupee is expected to become more jittery and choppy in the near-term
An Enforcement Directorate (ED) investigation into alleged foreign exchange law violations by edtech major Byju's and its CEO and co-founder Raveendran Bjyu is in the final stages of completion following which a show cause notice could be served to them, official sources said Tuesday. The central probe agency had in April searched two business and one residential premises, including that of the registered company of Byju's -- Think & Learn Pvt. Ltd. -- under the provisions of the Foreign Exchange Management Act (FEMA).
The Indian currency had appreciated by a whopping 85 paise in three-day surge
This is the highest closing level since May 11, 2016 when the rupee had finished at 66.56
All wholesale commodity markets, including bullion and metals, will remain closed on Monday on account of 'Republic Day'.
Investors turned cautious as trade war concerns between the US and China escalated and a persistent weakness in the rupee became lingering concerns leading to volatility in the market
All Sensex components ended in green, with Bajaj Finserv, HCL Tech, Bharti Airtel, IndusInd Bank, L&T, TCS, ONGC and ICICI Bank, Bajaj Finance and SBI gaining up to 6.64 per cent.
The move comes even as Bank of India on Wednesday said its corporate clients will suffer mark-to-market losses of around Rs 125 crore. It has 34 clients with 74 derivative transactions. Last week, State Bank of India said its clients may incur MTM losses of up to Rs 700 crore at the end of March 2008.
While Bajaj Finance, Asian Paints, Tata Steel, NTPC and SBI were among the other gainers, ONGC, Axis Bank, Tech Mahindra, Infosys and ICICI Bank were among the laggards. NSE Nifty advanced 82.75 points or 0.73 per cent to settle at 11,470.25.
M&M, Nestle India, IndusInd Bank, Kotak Bank, HCL Tech and Axis Bank were the other gainers. On the other hand, Tech Mahindra, ITC, NPTC, PowerGrid, Titan and ONGC finished with losses. The NSE Nifty surged 121.75 points to 10,739.95.
Rupee ends flat against dollar ahead of Fed policy outcome.
A higher opening in the domestic equity market influenced uptrend.
JP Morgan has downgraded the Indian information technology sector to 'underweight' as it believes the heydays of the sector are over. Rising margin headwinds in the near-term and the revenue headwinds in the medium-term from a potential macro slowdown, Ankur Rudra and Bhavik Mehta of JP Morgan said in the report, will mean that the sector's earnings upgrade cycle is behind. "We see peak revenue growth behind us and earnings before interest and taxes (EBIT) margins trending down from inflation, mean revision.
Forex traders said a stronger dollar also dragged the rupee down.
Investors and companies should brace for higher commodity prices over the next few weeks in the backdrop of Russian troops attacking Ukraine on Thursday. Meanwhile, US President Joe Biden threatened new sanctions against Russia for an act of aggression against Ukraine. All this, analysts believe, can push prices of key commodities such as crude oil, ammonia, urea, potash, and phosphates higher.
Taking a dig at the construction of a wall on a plot having several slum structures in Ahmedabad ahead of Trump's visit there, the Sena said the US president's trip would neither stop the fall of rupee's value in forex market nor offer betterment to those (slum dwellers) behind the wall.
The rupee has been under immense pressure due to a host of reasons including soaring crude oil prices, sustained foreign fund outflows and widening current account deficit.
Rajan's first few measures include swap window facility for banks to lure in NRI funds.
A weak dollar in overseas market in view of the Federal Reserve's cautious stance on interest rate strengthened the rupee value.
The rupee strengthened by 13 paise to 61.67 against the US dollar at close.
