Emerging market currencies, including the rupee, have gained support amid softening in the dollar. Reports suggesting that the US economy is on the verge of a recession have contributed to the greenback’s weakness
The Indian rupee opened stronger on Wednesday, breaking below the 88-mark for the first time in two weeks, as renewed trade discussions between India and the United States provided a boost to market sentiment. The rupee rose 23 paise to trade at 87.82 against the US dollar, following a previous close of 88.09, which had itself marked an intraday gain of seven paise.
Analysts noted that while the rupee has gained support from the resumption of India-US trade talks, it is likely to face resistance around 88.20. “A decisive break below 87.90 could pave the way toward 87.50 or even 87.20,” they said, indicating potential further gains if market conditions remain favourable.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was trading higher at 96.73, up 0.11 per cent. Brent crude futures edged 0.20 per cent lower to $68.33 per barrel, reflecting a relatively subdued trend in global oil markets.
Emerging market currencies, including the rupee, have gained support amid softening in the dollar. Reports suggesting that the US economy is on the verge of a recession have contributed to the greenback’s weakness. Mark Zandi, chief economist at Moody’s, recently highlighted that state-level data from the US indicates that the country is “on the edge of recession,” citing spending, employment, and manufacturing trends. He also warned that tariffs could affect US companies’ profits and noted ongoing challenges in the housing sector.
Market analysts also attributed the rupee’s gains to optimism surrounding bilateral trade talks, which could enhance investor confidence and strengthen economic relations between India and the US. At the same time, market participants remained cautious, keeping a close eye on the upcoming US Federal Reserve policy meeting, which is widely expected to announce an interest rate cut. Any deviation from expectations could trigger volatility in currency and capital flows.
“Dovish commentary from the Fed may support further decline in the dollar, while a hawkish tone could cause a pullback,” analysts added.
The strengthening rupee coincided with robust performance in Indian equity markets on Tuesday, as the resumption of India-US trade negotiations and expectations of a US rate cut provided momentum for domestic stocks. The BSE Sensex closed at 82,380.69, up 594.95 points or 0.73 per cent, after opening slightly higher at 81,852.11. The index extended gains through the session, reaching an intraday high of 82,443.48.
The NSE Nifty 50 index ended at 25,239.10, up 169.90 points or 0.68 per cent. “The domestic market sustained its recovery trend, supported by favourable global cues on expectations of a 25-basis-point rate cut in the forthcoming US Fed policy decision, along with renewed optimism from India-US trade negotiations,” said Vinod Nair, Head of Research at Geojit Investments Limited. He added that auto and consumer durable stocks outperformed ahead of new GST rate rollouts and festival-driven demand expectations.
From the Sensex basket, Kotak Bank, Mahindra & Mahindra, L&T, Maruti Suzuki, Bharti Airtel, Tata Steel, Adani Airports, Axis Bank, HCL Tech, NTPC, TCS, BEL, Eternal, SBI, Titan, Tech Mahindra, and PowerGrid settled in positive territory, while Bajaj FinServ and Asian Paints were among the top losers.
Sectoral indices largely closed higher, reflecting broad-based gains. Nifty Financial Services rose 102 points or 0.39 per cent, Nifty Bank jumped 259 points or 0.47 per cent, Nifty Auto soared 385 points or 1.44 per cent, and Nifty IT ended 310 points or 0.86 per cent higher. Nifty FMCG was the only sectoral index in the red.
Broader markets also followed the positive trend, with Nifty Small Cap 100 jumping 171 points or 0.95 per cent, Nifty Midcap 100 gaining 313 points or 0.54 per cent, and Nifty 100 rising 170 points or 0.66 per cent.
The rupee maintained gains, trading 0.13 per cent higher at 88.05, supported by optimism over India-US trade talks and expectations of a US rate cut. Analysts emphasized that the combination of trade optimism, robust domestic fundamentals, and supportive global cues could sustain investor confidence in the near term.
As markets brace for the Fed’s policy announcement, both the rupee and equities remain sensitive to global developments, including economic data from the US and international trade negotiations. While domestic macro fundamentals continue to provide support, market participants are closely monitoring how developments abroad might shape capital flows and market sentiment in the coming weeks.
The Indian rupee opened stronger on Wednesday, breaking below the 88-mark for the first time in two weeks, as renewed trade discussions between India and the United States provided a boost to market sentiment. The rupee rose 23 paise to trade at 87.82 against the US dollar, following a previous close of 88.09, which had itself marked an intraday gain of seven paise.
Analysts noted that while the rupee has gained support from the resumption of India-US trade talks, it is likely to face resistance around 88.20. “A decisive break below 87.90 could pave the way toward 87.50 or even 87.20,” they said, indicating potential further gains if market conditions remain favourable.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was trading higher at 96.73, up 0.11 per cent. Brent crude futures edged 0.20 per cent lower to $68.33 per barrel, reflecting a relatively subdued trend in global oil markets.
Emerging market currencies, including the rupee, have gained support amid softening in the dollar. Reports suggesting that the US economy is on the verge of a recession have contributed to the greenback’s weakness. Mark Zandi, chief economist at Moody’s, recently highlighted that state-level data from the US indicates that the country is “on the edge of recession,” citing spending, employment, and manufacturing trends. He also warned that tariffs could affect US companies’ profits and noted ongoing challenges in the housing sector.
Market analysts also attributed the rupee’s gains to optimism surrounding bilateral trade talks, which could enhance investor confidence and strengthen economic relations between India and the US. At the same time, market participants remained cautious, keeping a close eye on the upcoming US Federal Reserve policy meeting, which is widely expected to announce an interest rate cut. Any deviation from expectations could trigger volatility in currency and capital flows.
“Dovish commentary from the Fed may support further decline in the dollar, while a hawkish tone could cause a pullback,” analysts added.
The strengthening rupee coincided with robust performance in Indian equity markets on Tuesday, as the resumption of India-US trade negotiations and expectations of a US rate cut provided momentum for domestic stocks. The BSE Sensex closed at 82,380.69, up 594.95 points or 0.73 per cent, after opening slightly higher at 81,852.11. The index extended gains through the session, reaching an intraday high of 82,443.48.
The NSE Nifty 50 index ended at 25,239.10, up 169.90 points or 0.68 per cent. “The domestic market sustained its recovery trend, supported by favourable global cues on expectations of a 25-basis-point rate cut in the forthcoming US Fed policy decision, along with renewed optimism from India-US trade negotiations,” said Vinod Nair, Head of Research at Geojit Investments Limited. He added that auto and consumer durable stocks outperformed ahead of new GST rate rollouts and festival-driven demand expectations.
From the Sensex basket, Kotak Bank, Mahindra & Mahindra, L&T, Maruti Suzuki, Bharti Airtel, Tata Steel, Adani Airports, Axis Bank, HCL Tech, NTPC, TCS, BEL, Eternal, SBI, Titan, Tech Mahindra, and PowerGrid settled in positive territory, while Bajaj FinServ and Asian Paints were among the top losers.
Sectoral indices largely closed higher, reflecting broad-based gains. Nifty Financial Services rose 102 points or 0.39 per cent, Nifty Bank jumped 259 points or 0.47 per cent, Nifty Auto soared 385 points or 1.44 per cent, and Nifty IT ended 310 points or 0.86 per cent higher. Nifty FMCG was the only sectoral index in the red.
Broader markets also followed the positive trend, with Nifty Small Cap 100 jumping 171 points or 0.95 per cent, Nifty Midcap 100 gaining 313 points or 0.54 per cent, and Nifty 100 rising 170 points or 0.66 per cent.
The rupee maintained gains, trading 0.13 per cent higher at 88.05, supported by optimism over India-US trade talks and expectations of a US rate cut. Analysts emphasized that the combination of trade optimism, robust domestic fundamentals, and supportive global cues could sustain investor confidence in the near term.
As markets brace for the Fed’s policy announcement, both the rupee and equities remain sensitive to global developments, including economic data from the US and international trade negotiations. While domestic macro fundamentals continue to provide support, market participants are closely monitoring how developments abroad might shape capital flows and market sentiment in the coming weeks.
