Rupee appreciated by 27 paise to 84.96 against the US dollar in early trade on Tuesday, buoyed by strong foreign fund inflows, healthier domestic economic data, and easing global tensions.
Forex traders observed that India’s manufacturing and industrial sectors both grew by 3 per cent, highlighting the strength of domestic demand. Additionally, a significant rally in domestic equities, fueled by an influx of foreign investments, helped boost market sentiment.
Despite this positive movement, caution prevails, with traders pointing out that any rise in tensions between India and Pakistan could quickly reverse the rupee’s gains and place fresh pressure on the currency, similar to past geopolitical situations.
In the interbank forex market, the rupee began the day at 85.06 against the dollar, before gaining ground to 84.96, reflecting a 27-paise improvement from its previous closing value. During early trading, it also briefly touched a low of 85.15 against US dollar.
On Monday, the rupee had appreciated by 18 paise to settle at 85.23 against the US dollar. “On the global front, a more diplomatic tone has emerged. US Treasury Secretary Scott Bessent indicated that negotiations with Asian allies, including India and Japan, are progressing well. Importantly, China has shown signs of de-escalation by offering key exemptions on tariffs, signalling a willingness to reduce trade tensions,” CR Forex Advisors MD Amit Pabari said.
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Measures such as tariff exemptions on select goods and a softening stance on automotive tariffs are being seen as deliberate efforts to avoid a full-blown trade war and to ease pressure on global supply chains, he added.
Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six major currencies, rose 0.17 per cent to 99.18. Brent crude, the global oil benchmark, declined by 0.68 per cent to $65.41 per barrel in futures trading.
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Stock market summary
Tracking mixed global cues, Indian equities opened higher on Tuesday (April 29, 2025). The 30-share BSE Sensex was trading at 80,396.92, while the NSE Nifty50 edged up to 24,370.70 at the open. Broader markets also moved higher, with the smallcap segment outperforming the benchmark indices.
Additionally, the high-beta Nifty Bank index surged nearly 500 points, or 0.85 per cent, with all its 12 constituents trading in the green as of the latest count.
Foreign institutional investors (FIIs) were net buyers, purchasing equities worth Rs 2,474.10 crore on Monday, according to stock exchange data.
On the domestic macroeconomic front, India’s industrial production grew by 3 per cent month-on-month in March. However, on a year-on-year basis, it slipped from 5.5 per cent, largely due to weaker performances in the manufacturing, mining, and power sectors.
(With inputs from PTI)
