The Indian rupee and benchmark equity indices ended flat on Thursday, a day ahead of Prime Minister Narendra Modi and US President Donald Trump’s high-stakes meeting.
The rupee closed at 86.8963 to the US dollar, compared with 86.8887 in the previous session. Traders noted that the rupee was likely being supported by the RBI, possibly around the 86.90/$ level. “In the past, RBI support has not lasted long, and with the fundamentals remaining the same, with foreign portfolio investors (FPIs) buying dollars, the rupee may head back to the 87.50-88 range,” said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors.
Meanwhile, the dollar index slipped 0.2% to 107.68, after climbing to 108.50 on Wednesday.
At present, most importers have likely hedged their positions for the next month, so demand for dollars may not be very high at the moment. However, demand is expected to rise gradually, which could push the rupee lower, traders said. The rupee is expected to trade in the range of 86.65 to 87.25 as the market awaits India’s trade data for January.
The Sensex settled marginally lower by 32.11 points, or 0.04%, at 76,138.97, and the Nifty fell by 13.85 points, or 0.06%, to 23,031.40, marking a seventh consecutive session of decline. Both indices had been up by nearly 0.80% in the first half of the day but gave up all the gains, primarily due to declines in IT and FMCG stocks.
“Despite initial market optimism driven by easing domestic inflation data, the rally lost momentum amid uncertain global cues and subdued corporate earnings,” said Vinod Nair, Head of Research at Geojit Financial Services.
Market participants are closely monitoring the outcome of the Trump-Modi discussions for any potential trade or tariff concessions, which could lead to a pullback rally, Nair added.
With Thursday’s decline, the Sensex has now shed 2,445 points, or 3.11%, while the Nifty has fallen by 708 points, or 2.98%, in the past seven trading sessions.
The broader indices saw mixed movements, with the BSE Midcap index ending flat, while the BSE Smallcap index continued its losing streak for the fifth straight session, down 0.43%.
Market breadth was negative, with 2,089 stocks declining compared to 1,858 gainers. BSE’s total market capitalization fell by Rs 19,946 crore to Rs 407.26 lakh crore.
Foreign portfolio investors (FPIs) continued their selling spree, offloading shares worth Rs 2,789.91 crore, while domestic institutional investors (DIIs) bought shares worth Rs 2,934.50 crore, according to provisional data from the exchanges.
The IT, FMCG, TECK, consumer durables, and oil & gas sectors were the top losers, falling up to 0.93%, while metal, realty, healthcare, telecom, and power stocks were the top gainers, rising up to 1.26%.
