The Indian rupee appreciated six paise to 78.27 against the US dollar (21.32 versus the UAE dirham) in opening trade on Monday as heavy buying in Indian equities and weakness in the greenback strengthened investor sentiment.
However, elevated crude prices and persistent foreign fund outflows restricted the rupee's gain, forex dealers said.
At the Indian interbank foreign exchange, the rupee opened sharply up at 78.24 against the US dollar, then inched lower to quote 78.27, registering a gain of 6 paise over the last close.
In the previous session, the rupee had closed at its all-time low of 78.33 against the US dollar.
On the Indian equity market front, the 30-share Sensex was trading 589.05 points or 1.12 per cent higher at 53,317.03, while the broader NSE Nifty advanced 179.65 points or 1.14 per cent to 15,878.90. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.14 per cent to 104.03.
Global oil benchmark Brent crude futures rose 0.57 per cent to $113.77 per barrel. Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs23.5 billion on a net basis, as per exchange data.
Foreign investors continue to desert Indian equity markets and pulled out close to Rs460 billion so far this month following monetary policy tightening by the Reserve Bank and US Federal Reserve, high oil prices and volatile rupee.
Given the policy normalisation narrative by the US Fed and other major central banks, coupled with high oil prices and volatile rupee, FPIs are likely to stay away from emerging market assets, said Hitesh Jain, lead analyst for institutional equities at Yes Securities.
(With inputs from PTI)
Copyright © 2022 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).