Rupee, Sensex rebound as crude oil price slides

The dollar’s weakness against key rivals overseas, sustained foreign fund inflows and heavy buying in domestic equities also supported the rupee’s recovery.

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Brent crude futures, the global oil benchmark, slipped 3.6 per cent to $71.71 per barrel paving the way for the recovery in the rupee and the equity markets.

The rupee on Monday rebounded by 23 paise to close at 70.02 against the US dollar on Friday and the BSE Sensex rallied 336 points to reclaim the 39,000-level after Brent crude oil prices receded from a six-month high of US $ 75.60 per barrel.

Brent crude futures, the global oil benchmark, slipped 3.6 per cent to $71.71 per barrel paving the way for the recovery in the rupee and the equity markets. The dollar’s weakness against key rivals overseas, sustained foreign fund inflows and heavy buying in domestic equities also supported the rupee’s recovery. The rupee had slumped 39 paise to close at more than six-week low of 70.25 against the US dollar on Thursday.

“Indian rupee recovered Thursday’s loss after Brent crude oil prices recedes from a six-month high of $75.60/barrel,” V K Sharma, head PCG & capital markets strategy, HDFC Securities said adding that since start of the April the correlation between Brent crude oil and the USD-rupee was steadily rising. On a weekly basis, the domestic currency saw a 67 paise decline.

The 30-share BSE Sensex, which opened on a firm footing, rallied in late-afternoon trade. It finally closed at 39,067.33, up 336.47 points, or 0.87 per cent. The NSE Nifty climbed 112.85 points, or 0.97 per cent, to 11,754.65. It was a highly volatile week for the benchmarks, with the Sensex logging a gain/loss of more than 300 points in four out of five sessions.

Vinod Nair, head of research, Geojit Financial Services, said, “Investors were on a profit booking mood this week given weak global cues and general elections. Additionally, the end of US waivers on oil imports from Iran has led to rise in oil prices which was a concern for the market. The sentiment was further impacted by the rise in 10-year bond yield and the rupee depreciation. Global markets were mixed on account of results and concern over slowdown in Chinese central bank’s stimulus packages.” On Friday, fall in oil prices in expectation of rise in output by OPEC provided a positive impetus for market. Further, better Q4 results and strong FIIs flows helped market to end on a positive note. However, mid and small caps continued to underperform.

Tata Steel was the biggest gainer in Sensex pack Friday, spurting 6.67 per cent after the firm posted a rise in consolidated income for the March quarter. Axis Bank gained 2.61 per cent after it reported a net profit of Rs 1,505 crore for March quarter, driven by a significant decline in provisioning and higher interest income. ICICI Bank, TCS, SBI, RIL, Infosys, HDFC twins, Kotak Bank, HUL, NTPC, IndusInd Bank, Sun Pharma, HCL Tech, Bajaj Finance L&T and ITC rose by up to 3.05 per cent. “Falling crude prices and rising rupee helped sentiments on the street. Chinese stocks fell on Friday, posting their sharpest weekly fall since October 2018, as investors feared that China may not continue its stimulus measures amid signs of economic stabilisation. The US-China trade issues that are taking longer than expected to be resolved also weighed on the sentiment,” said Deepak Jasani, head – retail Research, HDFC Securities.

Sectorally, BSE metal, bankex, oil and gas, IT, energy and teck indices ended in the green and gained1.92 per cent. BSE auto, consumer durables and telecom finished with losses of up to 1.06 per cent. Meanwhile, broader indices underperformed the benchmarks, with the BSE Midcap and Smallcap shedding up to 0.44 per cent.