Rupee rises 11 paise to 73.17 against dollar on equity rally

The rupee gained 11 paise to settle at 73.17 against the US dollar on Tuesday on the back of rally in domestic equities and weak American currency.

A rebound in regional currencies amid growing risk appetite among investors also supported the local currency.

At the interbank forex market, the rupee opened at 73.16, and hit an intra-day high of 73.14 and a low of 73.31. It finally finished at 73.17, higher by 11 paise over its last close.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.22 per cent to 90.52 ahead of the testimony of US Secretary of the Treasury nominee Janet Yellen later in the day.

On the domestic equity market front, the BSE Sensex ended 834.02 points or 1.72 per cent higher at 49,398.29 while the broader NSE Nifty advanced 239.85 points or 1.68 per cent to 14,521.15.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 650.60 crore on a net basis on Monday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 1.26 per cent to USD 55.44 per barrel.

''The Indian rupee appreciated against the US currency tracking a marginally weak dollar index and a rebound in regional equities and currencies,'' said Sriram Iyer, Senior Research Analyst at Reliance Securities.

The rupee had initially weakened to an intra-day low of 73.31 earlier in the session on the back of dollar demand from importers.

Most Asian currencies appreciated against the US dollar amid upbeat risk appetite.

Investors will now await comments from Janet Yellen on US stimulus measures and the dollar during her Senate confirmation hearing later in the day, Iyer said.

On the central bank side, investors will await key monetary policy decisions from the European Central Bank and the Bank of Japan on Thursday, he added. PTI MR