Rupee surges to biggest single-day high in a month, rises 77 paise to close at 85.98 against US dollar as oil prices ease
The Indian rupee appreciated by 77 paise to settle at 85.98 against the US dollar on Tuesday, aided by a fall in the American currency and easing oil prices after US President Donald Trump announced a ceasefire between Iran and Israel.
The domestic currency logged its biggest single-day gain in a month. It opened at 86.1 against the dollar compared to the previous close of 86.75. The currency touched a high of 85.92 during intraday trades.
'Rupee traded strong supported by a sharp 12 per cent drop in crude oil prices, which helped stabilize the currency from its earlier lows near 86.75. Anticipation of renewed FII inflows also added strength to the rupee,' said Jateen Trivedi, VP research analyst – Commodity and Currency, LKP Securities.
Brent crude fell to nearly $69 per barrel, down 2.91 per cent.
On Monday, the US President announced that Israel and Iran have agreed on a 'complete' and 'total ceasefire'. However, Israel later claimed that it had identified missiles launched by Iran, which the latter denied.
Market participants will now closely watch the upcoming testimony by the Federal Reserve Chair Jerome Powell for further cues. The rupee is expected to trade in a range of 85.75 to 86.25 against the US currency.
Meanwhile, domestic equity market indices, Sensex and Nifty, rallied over 1.3 per cent during intraday trades but pared their gains to close at marginally higher amid Israel's claims of a ceasefire violation by Iran.
The BSE's 30-share Sensex rose 0.19 per cent, or 158.32 points, to close at 82,055.11, while the Nifty 50 gained 0.29 per cent, or 72.45 points, to finish at 25,044.35.
'Initial gains in the domestic market, driven by the ceasefire announcement and sharp drop in crude prices, were short-lived as renewed geopolitical tensions in the Middle East unsettled investor sentiment,' said Vinod Nair, head of research, Geojit Investments Ltd.
The market also witnessed heightened volatility due to expiry day dynamics.
'Tensions in West Asia resurfaced after Israel accused Iran of violating the ceasefire, prompting a risk-off mood globally. Nevertheless, oil prices extended their decline—Brent near $70 and WTI at $65 per barrel—providing relief to import-heavy economies like India,' said Vikram Kasat, head – advisory, PL Capital.
Mid- and small-cap segments once again proved more resilient, as investors sought value in broader market themes. The Nifty Midcap 100 gained 0.71 per cent and Nifty Smallcap 100 rose 0.72 per cent.
Public sector banks and metal counters witnessed renewed interest, while oil marketing companies remained under pressure.
Nifty Metal climbed 1.01 per cent and Nifty PSU Bank surged 1.46 per cent.
The NSE companies that gained the most included Adani Ports (2.89 per cent), Jio Financial Services (2.85 per cent), Shriram Finance (2.09 per cent) and Grasim Industries (2.06 per cent).
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