Mumbai: The rupee on Monday rose by 10 paise to close at 71.30 against the US dollar amid easing crude oil prices and weakening of the American currency in the overseas market.
Forex traders said while weak dollar and easing crude oil prices supported the rupee, heavy selling in domestic equities weighed on the local unit and restricted the upmove.
At the interbank foreign exchange market, the local currency opened on a positive note at 71.36. During the day, it saw a high of 71.28 and a low of 71.43.
The Indian currency settled higher by 10 paise at 71.30 against its previous close of 71.40 on Friday.
"Indian rupee gained on lower crude oil price and dollar inflows related to DMart's QIP. Rupee remained resilient to higher dollar index amid strong foreign fund inflows in equity market," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.
Sharma further said that "broadly, local currency is consolidating in the range of 72 to 71 a dollar". CPI and IIP would be keenly watched local data point this week, he added.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.06 percent to 98.62.
The 10-year Indian government bond yield was at 6.44 percent.
"Rupee opened on a flat note but was weighed down against the US dollar as domestic equities came under pressure amid concerns over spread of coronavirus," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Somaiyaa further said, "on the domestic front, market participants will be keeping an eye on inflation and IIP and weaker-than-expected number could cap the gains".
Meanwhile, the Brent crude fell 0.17 percent to trade at $54.38 per barrel.
Broadly, crude prices have seen some moderation in the past few sessions over demand slump amid rising coronavirus cases in China and other regions.
On the domestic equity market front, the 30-share BSE Sensex settled 162.23 points, or 0.39 percent, down at 40,979.62. It hit an intra-day low of 40,798.98. Similarly, the broader NSE Nifty slipped 66.85 points, or 0.55 percent, to 12,031.50.
Foreign institutional investors sold equities worth Rs 184.58 crore on a net basis on Monday, according to provisional exchange data.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.2476 and for rupee/euro at 78.2280. The reference rate for rupee/British pound was fixed at 92.2248 and for rupee/100 Japanese yen at 64.79.
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Updated Date: Feb 10, 2020 19:18:38 IST