Rupee surges 29 paise to 76.11 against US dollar in early trade

The rupee appreciated 29 paise to 76.11 against the US dollar in opening trade on Thursday amid weakening of the American currency in the overseas market.

At the interbank foreign exchange, the rupee opened at 76.17 against the American dollar, then gained further ground to quote at 76.11, registering a rise of 29 paise from the last close.

On Wednesday, the rupee had settled at 76.40 against the American currency.

The Indian rupee opened stronger against the US dollar this Thursday after a surprise rate hike by the Reserve Bank of India and the US Fed Chairman Powell pushing back against a steeper 75-basis points rate hike in the coming months, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Additionally, foreign funds inflows into the local assets through the LIC IPO could also aid sentiments.

However, Asian and emerging market currencies have started weak and a surge in oil prices could keep the appreciation bias capped. Moreover, the bearish rupee outlook remains intact on expectation of more 50-basis points rate hikes by the US Fed in the coming months, Iyer noted.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.03 per cent lower at 102.55.

The US dollar extended losses this Thursday morning in Asian trade after Powell said the committee wasn't actively considering a steeper 75-basis points rate hike in the coming months even as inflation continues to run well above the Fed's 2 per cent target.

On the domestic equity market front, the 30-share Sensex was trading 399.81 points or 0.72 per cent higher at 56,068.84 points, while the broader NSE Nifty advanced 125.75 points or 0.75 per cent to 16,803.35.

Global oil benchmark Brent crude futures rose 0.35 per cent to USD 110.53 per barrel.

Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 3,288.18 crore, as per stock exchange data.