Rupee logs 1st gain in 6 days; recuperates 13 paise

The Indian rupee on Thursday clocked its first gain after five sessions, closing 13 paise higher at 71.96 against the US dollar in line with domestic equities. A day after plunging below the psychological 72-level in over two months, the domestic currency opened on a positive note. As forex market participants weighed a range of macroeconomic factors posing challenges, the Indian currency turned volatile traded in the range of 71.85 to 72.24 to the US dollar.

It finally settled at 71.96 -- showing a gain of 13 paise over its previous close. Meanwhile, stronger US currency against its key rivals and surging crude oil prices capped the rupee's gains to some extent.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.01 percent to 98.38. Global crude oil benchmark Brent Futures surged 1.17 percent to trade at USD 63.10 per barrel.

Investors fretted over a host of negative factors like higher retail inflation print, weak IIP data, and worries over the US-China trade deal. After a weak set of government data indicated deepening of economic slowdown, Moody's Investors Service lowering India's GDP growth forecast further hit investor sentiment.

Moody's has slashed economic growth forecast to 5.6 percent for 2019, saying government measures do not address the widespread weakness in consumption demand. "We have revised down our growth forecast for India. We now forecast slower real GDP growth of 5.6 percent in 2019, from 7.4 percent in 2018," it said. "India's economic slowdown is lasting longer than previously expected."

Wholesale prices-based inflation eased further to 0.16 percent in October, as against 0.33 percent in September due to subdued prices of non-food articles and fall in prices of manufactured items, government data showed on Thursday. On the other hand, retail price based consumer inflation spiked to 16-month high of 4.62 per cent in October on costlier food items, reducing the headroom for a rate cut by the RBI in its monetary policy due next month.

The industrial production shrank by 4.3 per cent in September, registering the weakest performance in seven years due to output decline in manufacturing, mining and electricity sectors. Meanwhile, foreign institutional investors pulled out a net Rs 584.92 crore from Indian markets on Thursday, according to exchange data.

The 10-year government bond yield was down 0.18 percent at 6.52 percent. The BSE Sensex settled 170.42 points, or 0.42 percent, higher at 40,286.48. The index swung between a high of 40,348.61 and a low of 40,026.99 during the session. While, the NSE gauge Nifty ended with a gain of 31.65 points, or 0.27 per cent, at 11,872.10.