The Indian stock market opened higher in early trade on Tuesday, with selling risk still looming in the markets. The Nifty 50 index opened at 23,227 points with a gain of 141 points, while the BSE Sensex opened flat at 76,779 points with a gain of 449 points.
The rupee rebounded from its lowest-ever level and appreciated 21 paise to 86.49 against the US dollar in early trade on Tuesday on the back of retreating American currency and easing crude oil prices. According to forex traders, the Indian currency found support from positive inflation numbers and some recovery in domestic equity markets even though the outflow of foreign funds continued to play a negative role.
At the interbank foreign exchange, the rupee opened at 86.57 and pared further losses to trade at 86.49 against the greenback in initial deals, 21 paise higher from its previous close.
On Monday, the rupee logged its steepest single-day fall in nearly two years and ended the session 66 paise down at its historic low of 86.70 against the US dollar. The fall of 66 paise in one session was the steepest since February 6, 2023, when the unit had lost 68 paise.
The Indian currency has plunged more than Re 1 in the past two weeks from the closing level of 85.52 on December 30. It had breached the 85-per-dollar mark for the first time on December 19, 2024.
Last week, the local currency had declined 18 paise to settle at 86.04 against the US dollar on Friday, a day after registering a marginal gain of 5 paise. In the preceding back-to-back sessions on Tuesday and Wednesday, it had plunged 6 paise and 17 paise, respectively.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.37 per cent down at 109.41. Brent crude, the global oil benchmark, fell 0.28 per cent to USD 80.78 per barrel in futures trade.
According to the government data released on Monday, retail inflation declined to a four-month low of 5.22 per cent in December, mainly on account of easing of prices in the food basket, giving headroom to the Reserve Bank to reduce the key interest rate in upcoming monetary policy reviews.
The inflation based on the Consumer Price Index (CPI) eased for the second month in a row after it breached the Reserve Bank of India’s (RBI’s) upper tolerance level of 6 per cent in October.