Rupee gains 1 paisa to 82.16 against dollar as market sentiment improves

The rupee gained 1 paisa to 82.16 against the US dollar in early trade on Friday, tracking a weak greenback against major currencies and positive sentiment in the domestic equities market.

Forex traders said downward movement of crude oil prices also supported the local unit.

At the interbank foreign exchange, the domestic unit opened strong at 82.11 against the dollar and hit the lowest level of 82.17 before trading at 82.16, registering a rise of 1 paisa over its previous close.

On Thursday, the rupee closed at 82.17 against the US currency.

Participants were also cautious due to expectations of further interest rate hike by the US Federal Reserve and other central banks.

"Upside hopes were abandoned as soon as USDINR turned below 82.2. Look for bounce back today as long as 81.97 holds, but the 82.4 objective now appears far. Towards this end, expect selling pressure on first entry into the 82.15-82.20 region," Anand James, Chief Market Strategist at Geojit Financial Services, said in a pre-market note.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.04 per cent to 108.80.

Brent crude futures, the global oil benchmark, declined 0.09 per cent to USD 81.03 per barrel.

In the domestic equity market, the 30-share BSE Sensex advanced 109.93 points or 0.18 per cent to 59,742.28. The broader NSE Nifty inched up 21.95 points or 0.12 per cent to 17,646.40.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth Rs 1,169.32 crore, according to exchange data.