In the opening hours of trading on Friday, the rupee strengthened by 38 paisa to 82.75 against the US dollar as investors’ confidence increased as a result of India’s inclusion in the JPMorgan bond index. Forex dealers predicted that JPMorgan Chase & Co.’s move to incorporate Indian government bonds in its benchmark emerging-market index would have a significant impact on both the Indian debt market and international investors.
The local unit started out strongly at the interbank foreign exchange, rising 38 paisa from its previous close to open at 82.75. The rupee held steady against the dollar on Thursday, losing 2 paisa to end the day at 83.13.
According to traders, India’s inclusion in a significant global bond index will pave the way for further foreign investment in the country’s debt market. The rupee showed strength by strengthening by about 0.42 percent in the NDF markets and reaching levels around 82.80 as a result of India’s entry in the JPMorgan Bond Index.
This upward trend is expected to continue in the onshore market, which might eventually go towards 82.50 in the next sessions after the 82.80 levels are broken.
The dollar index, which measures the strength of the dollar against a basket of six different currencies, increased 0.12% to 105.48. The benchmark for world oil, Brent crude futures, was trading 0.61 percent higher at USD 93.87 per barrel.
The 30-share BSE Sensex was up 22.14 points, or 0.03 percent, at 66,252.38 points on the domestic equity market. The NSE Nifty, a more inclusive index, dropped 3.65 points, or 0.02 percent, to 19,738.70. According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth Rs.3,007.36 crore on Thursday, making them net sellers in the capital market.
