The stock market opened positively on Tuesday, with the Sensex rising 449 points to reach 76,779 and the Nifty climbing 141 points to 23,227 in early trade.
Rupee recovers after hitting record low
The Indian rupee appreciated 21 paise to 86.49 against the US dollar in early trade, bouncing back from its historic low of 86.70 the previous day.
- The rupee opened at 86.57 and later strengthened to 86.49 due to a weaker dollar and lower crude oil prices.
- Forex traders noted support from improved inflation data and gains in the domestic equity market, though continued foreign fund outflows posed challenges.
Recent currency trends
- On Monday, the rupee experienced its steepest one-day drop in nearly two years, falling 66 paise to close at its lowest-ever level of 86.70.
- Over the past two weeks, the rupee has declined by more than Re 1, crossing the 85-per-dollar mark for the first time on December 19, 2024.
Dollar index and crude oil prices
- The dollar index, which measures the strength of the US dollar against six major currencies, fell by 0.37% to 109.41.
- Brent crude prices dropped by 0.28% to $80.78 per barrel in futures trading.
Also Read: RBI uses Dollar-Rupee swaps to address liquidity crunch
Domestic market performance
- The BSE Sensex was trading 364.90 points higher at 76,694.91, while the Nifty gained 123.65 points to reach 23,209.60.
- However, Foreign Institutional Investors (FIIs) sold equities worth ₹4,892.84 crore on Monday.
Inflation eases in December
Government data showed retail inflation eased to a four-month low of 5.22% in December, driven by a decline in food prices.
This marks the second consecutive month of declining inflation after exceeding the RBI's upper limit of 6% in October.
The lower inflation provides room for the Reserve Bank of India to consider reducing interest rates in future monetary policy reviews.
With improving market sentiment, easing inflation, and a recovering rupee, investors remain cautiously optimistic amid global and domestic challenges.
Also Read: India’s market cap reaches $5.29 tn in 2024
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