Rupee rises by 14 paise to close at nearly 1 month high

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Mumbai, May 3 (PTI) The rupee rose by 14 paise to close a nearly one-month high of 73.95 against the US dollar on Monday following losses in the American currency in the global markets.

A fall in crude oil prices and positive economic data helped the local unit pare early losses.

The rupee had opened lower at 74.25 and hit the day's low of 74.33 later in line with early losses in the domestic equities.

The local unit, however, pared its losses in afternoon trade on the back of dollar sale by exporters, positive manufacturing data and a recovery in stock indices.

The rupee touched a high of 73.90 before closing at 73.95, the highest closing level since April 6.

'Rupee started the month on positive note amid lower dollar and recovery in domestic equities,' said Dilip Parmar, Research Analyst, HDFC Securities.

The rupee became the best-performing unit among Asian currencies on Monday. Sentiment turned positive for rupee and equity markets after better-than-expected April manufacturing PMI activities, Parmar said.

The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) was at 55.5 in April, little changed from March's reading of 55.4. In PMI parlance, a print above 50 means expansion while a score below 50 denotes contraction.

According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee appreciated against the US currency on Monday, as exporters' dollar sales as well as inflows outweighed the impact of weak Asian cues.

The unit had fallen to an intra-day low of 74.33 earlier in the session on rising COVID-19 cases in the country that could hamper the country’s growth outlook.

The daily COVID-19 cases in India showed a slight dip with 3,68,147 new coronavirus infections being reported in a day, taking the total tally of cases to 1,99,25,604, according to the Union Health Ministry data updated on Monday. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.14 per cent to 91.15.Brent crude futures, the global oil benchmark, declined 0.63 per cent to USD 66.34 per barrel.

On the domestic equity market front, the BSE Sensex rebounded from its early lows and settled 63.84 points or 0.13 per cent down at 48,718.52, while the NSE Nifty closed 3.05 points or 0.02 per cent higher at 14,634.15.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they pulled out Rs 3,465.07 crore on Friday, as per provisional data. PTI DRR MR MR