Indian rupee ended 13 paise lower at 72.56 per dollar, amid selling saw in the domestic equity market.
It opened lower at 72.53 per dollar against previous close of 72.43 and traded in the range of 72.50-72.69.
At close, the Sensex was down 871.13 points or 1.74% at 49,180.31, and the Nifty was down 265.40 points or 1.79% at 14,549.40.
“We expect the currency pair to trade in a range of 72.40 to 72.70 during the day. Overseas investors purchased domestic shares worth over USD 3.2 billion on a net basis, leading the rupee to appreciate moderately. Despite the decline in local stocks, the rupee gained as domestic funds and investors sold to counter foreign fund inflows into local stocks,” said Kshitij Purohit, Product Manager, Currency & Commodities at CapitalVia Global Research.
“We can see a “Flag candlestick” pattern being formed on hourly chart and prices are sustaining above the 15-SMA level, both these factors indicate that a bullish momentum can be witnessed in the upcoming sessions. However, if the above-mentioned pattern failed and prices does not sustain above the 15-SMA level, we may see a downfall till the levels of 72.40-72.30, which is acting as a major support level,” he added.
Oil prices edged higher on Wednesday as investors looked for bargains following the previous day’s plunge, but gains were capped as pandemic lockdowns in Europe and a build in US crude stocks curbed risk appetite and raised oversupply fears.
At 10:07 IST, the Sensex was down 440.97 points or 0.88% at 49,610.47, and the Nifty was down 133.80 points or 0.90% at 14,681.00.
Due to a sudden rise in the Dollar index the USDINR pair moved higher as most EM currencies depreciated. However, depreciation could be limited and the rupee is likely to trade in a range due to aggressive Call writing in OTM strikes and weakness in crude oil prices, said ICICI Direct.
The dollar-rupee March contract on the NSE was at Rs 72.54 in the last session. The open interest increased by almost 0.8% for the March series, it added.