The Indian rupee climbed to a 3-week high against its US counterpart despite weak opening in the equity market. Traders continue to mull yesterday's economic report, which showed that India's Inflation plunged to a two-decade low.
The BSE Sensex is moving in a very narrow range. The benchmark is now trading at 8,908, down 94 points over the previous close, while the S&P CNX Nifty is down 0.80% to 2,785.
On the BSE, the market breadth is slightly negative, with 733 gainers compared to 788 stocks that are declining. The broad-based BSE 500 index and the mid-cap index are trading in negative territory, but the small-cap index is showing a marginal gain. The Sensex futures are trading at a premium of 109 points to the benchmark.
India's inflation rate for the week ended March 7 plunges to a two-decade low of 0.44%, compared to 2.43% in the preceding week, paving way for the Reserve Bank of India to announce a further cut in interest rates to stimulate the economy. This is the lowest number in the current WPI series and is heading towards zero, and analysts expect it would soon turn negative.
On March 03, the Reserve Bank of India, or RBI, slashed its repo rate by 50 basis points to 5%. The RBI reduced the reverse repo rate also by 50 basis points to 3.5%.
At about 11:30 pm ET, the rupee reached a new 3-week high of 49.90 against the greenback, compared to Thursday's closing value of 50.26. The rupee may likely target the 49.3 level against the buck, if it rises further.
Source : www.rttnews.com