Rupee recoups losses, follows lower oil and rebound in risk assets

Rupee recoups losses, following lower oil and rebound in risk assets

The energy-sensitive rupee jumped nearly 0.5% on Friday and recouped some losses after suffering its worst session in more than 10 months on Thursday, supported by a pullback in oil prices and a rebound in domestic equities, following the increase in global risk appetite .

Investor optimism was fueled by coordinated sanctions against Russia targeting its banks, which contributed to a tepid rebound in global equities as flight-to-safety trades eased somewhat in the hunt for bargains. before the weekend.

The rupee last changed hands at 75.33 to the dollar, a gain of around 0.5% from Thursday’s close at 75.60, following the greenback’s fall against a basket of currencies.

On Thursday, the rupiah fell 1.5% to close at 75.60 against the US dollar as markets remained jittery over the worsening Ukraine crisis.

Oil prices initially fell sharply but were still above $100 a barrel, while the shimmer of gold lost its luster.

Still, the jump in equities was modest and markets remained sharply lower from levels at the start of the week.

Indeed, while Indian equity indices rebounded and ended higher after falling for seven consecutive sessions on Friday, the BSE Sensex index and the Nifty were down around 3.5% for the week.

“Global markets took a breather as new US sanctions did not target Russia’s oil exports or their access to the SWIFT global payment network. However, the market will continue to remain volatile, following new developments in the Russian-Ukrainian war,” Vinod Nair, research director at Geojit Financial Services, told PTI.

“From India’s perspective, the biggest risk comes from the impact of rising geopolitical tensions on crude oil and commodity prices. If Crude holds above $100, it could create a negative economic impact in the form of higher inflation and a deterioration in the current account. deficit,” he added.