Rupee pulls back after 5-day fall, up 2 paise on oil relief

Reversing a straight five-session downtrend, the rupee gains marginally by 2 paise to end at 64.26 against the US dollar in line with a good recovery in equity markets.
Forex market largely withstood the initial sharp volatility before staging a spirited recovery towards the tail-end session despite firm dollar overseas.
A sharp fall in global crude prices which marked its biggest loss in two months predominantly helped the rupee to reverse its early bearish undertone.
The rupee had depreciated by a staggering 70 paise in five-day losing run, giving back all its 2018 gains.
The Indian currency touched a fresh two-month low of 64.40 in intra-day trade, spooked by capital outflow concerns.

Foreign investors pulled out a net Rs 1,022.50 crore from stocks yesterday.

Earlier, the rupee resumed lower at 64.35 as compared to Wednesday's close of 64.28 at the Interbank Foreign Exchange (forex) market due to increased demand for the US currency from importers and banks.
It later swung between 64.40 and 64.15 most part of the day, though overnight policy statement from the RBI calmed nervous bond market to some extent.
The apex bank yesterday maintained a neutral policy stance citing inflation risk.
The domestic unit finally settled the day at 64.26, showing a small gain of 2 paise.
On the international energy front, global crude prices hit their lowest in six weeks after data showed US crude output had reached record highs and the North Sea's largest crude pipeline reopened following an outage.

Brent crude futures were trading lower at USD 65.05 a barrel in early Asian trading.
Meanwhile, domestic equity markets staged a modest recovery, concluding an uninterrupted seven-day panic-driven capitulation that wiped out all gains made in 2018 so far. Investors lapped up key heavyweight shares judging that they were cheaply valued after the brutal sell-off.
It was a steep spike in bond yields last Friday that sparked the initial Wall Street rout, which subsequently spilled over to other financial markets worldwide.
Higher fiscal deficit concerns and imposition of long- term capital gains tax (LTCG) of 10 per cent in Budget 2018 also led to turbulence on Indian bourses.

The BSE Sensex and NSE Nifty shed nearly 6 per cent each in the previous seven sessions.
The flagship BSE-Sensex shot up 330 points to close at 34,413.16, while Nifty surged over 100 points to 10,576.85.
The RBI meanwhile fixed the reference rate for the dollar at 64.1616 and for the euro at 78.7455.
Globally, the US dollar hit a two-week high against a basket of major currencies after the US Senate reached the deal averting the second US government shutdown this year.
The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 90.37 in early trade.

In cross-currency trades, the rupee fell back against the pound sterling to end at 89.33 per pound from 89.23, but continued to rally against the euro to finish at 78.64 from 79.35 yesterday.
It also strengthened against the Japanese yen to close at 58.59 per yens from 58.88 earlier.
Elsewhere, the common currency slipped to fresh 2-week low against the US dollar spooked by comments from President of the German Bundesbank Jens Weidmann that a substantial extension of QE will not be justified if growth continues.
Pound sterling was down for the fourth straight day against the dollar, hurt by recent surveys confirming the economy's fragile state and fresh tensions over Britain's divorce negotiations with the European Union.

In forward market today, premium for dollar remained under pressure owing to sustained receiving from exporters.
The benchmark six-month forward premium payable in July dropped to 137-139 paie from 139-141 paise and the far-forward January 2019 contract also fell to 273-275 paise from 278-280 paise previously.