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Expect Indian Rupee to trade on negative note: Angel

From the intra-day perspective, expect Indian Rupee to trade on a negative note on the back of weak market sentiments, say Angel Broking.

November 21, 2014 / 12:42 PM IST

Angel Broking's report on rupee

Dollar/INR

The Indian Rupee traded on a positive note after hitting nine month low and appreciated marginally in yesterday’s trading session. The currency appreciated on the back of intervention by Reserve Bank of India (RBI) in selling dollars at 62.20 levels. Further, exporters finding 62 as an attractive level and selling of dollars at same level acted as a positive factor.

However, in the initial part of the trade currency depreciated due to weak economic data from China and dollar demand from oil companies. Further, state owned banks buying dollars as India need to pay $400 million to Iran which will allow Tehran to recover part of its overseas frozen oil revenues which acted as a negative factor. The currency touched an intra-day high of 61.88 and closed at 61.92 on Thursday.

For the month of November 2014, FII inflows in equities totaled at Rs.11190.04 crores ($1819.55 million) as on 20th November 2014. Year to date basis, net capital inflows stood at Rs.93456.19 crores ($15510.07million) as on 20th November 2014.

Outlook

From the intra-day perspective, we expect Indian Rupee to trade on a negative note on the back of weak market sentiments, strength in the DX along with dollar demand from oil companies. Further, state owned banks buying dollars to pay Iran will act as a negative factor. However, inflow of foreign funds in equities and debt markets coupled with RBI selling dollars will cushion sharp downside or reversal in the Indian Rupee.

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