Rupee breaks 3-day rally, down 3 Paise at 63.87 a dollar
Mumbai: Snapping its three-session winning run, the rupee today ended lower by 3 paise at 63.87 against the US currency following fresh bouts of dollar demand from importers amid the US political jitters.
Trading was extremely volatile as the currency market witnessed wide swings against the backdrop of US government shutdown.
The US government shutdown went into effect at midnight on Friday after Senate negotiators failed to reach an agreement on a last minute deal to keep the government funded amid a dispute over immigration and border security.
The domestic currency oscillated between a high of 63.71 and a low of 64 a dollar.
However, the record-breaking rally in local equities along with robust capital inflows somewhat cushioned the impact of the fall.
In the meantime, country's foreign exchange reserves rose for a fifth consecutive week to yet another record high of USD 413.825 billion in the week to January 12, the RBI said.
Foreign funds and overseas investors continued their portfolio-buying spree and infused a whopping Rs 8,700 crore in the Indian capital markets this month so far on expectation of recovery in corporate earnings and attractive yields.
According to the depositories data, FPIs infused in a net amount of Rs 5,769 crore in equities and Rs 2,940 crore in the debt markets.
In the international commodity front, crude prices rebounded after a brief fall, largely helped by a drop in US drilling activity and also impacted by fighting in Syria between Turkish forces and Kurdish fighters.
Brent crude futures were trading higher at USD 68.79 a barrel in early Asian trading.
Meanwhile, domestic markets continued their relentless upward march for the fourth session on frantic buying activity in key front-line stocks induced by acceleration in corporate earnings growth and growing optimism ahead of the Budget 2018.
In contrast, most Asian stock markets were mixed and rather muted overshadowed by US political turmoil.
The flagship BSE-Sensex shot up over 286 points to end at 35,798.01, while Nifty soared 72 points at 10,966.20.
At the Interbank Foreign Exchange (forex) market, the rupee opened lower at 63.88 as compared to weekend close of 63.84 due to fresh demand for the American currency from importers and banks.
It later drifted sharply to hit day's low of 64.00, breaching the key support level on heavy dollar pressure.
The local currency, however, made a strong comeback in in later afternoon deals to touch a high of 63.71 before pulling back to settle at 63.87, showing a loss of 3 paise, or 0.05 per cent.
The rupee had strengthened by a healthy 20 paise in three-day rally after recovering from a two-week low.
The RBI meanwhile fixed the reference rate for the dollar at 63.8895 and for the euro at 78.1241.
On the global front, the greenback remained broadly lower against other major currencies, though rising Treasury yields seem to be assuring the US currency's appeal.
The dollar index, which measures the greenback's value against a basket of six major currencies, was down at 90.32 in early trade.
In cross-currency trades, the rupee retreated against the pound sterling to conclude at 88.79 per pound from 88.54 and remained weak against the Japanese yen to finish at 57.70 per 100 yens from 57.68 last Friday.
The home unit, however recovered marginally against the euro to close at 78.25 from 78.27 earlier.
Elsewhere, the Euro rebounded to trade slightly higher against the US dollar supported also by news of German Social Democrats (SPD) voting in favour of coalition talks with Angela Merkel's CDU/CSU.
The common currency booked a fifth straight week of gains in advance of Thursday's ECB meeting.
At the same time, the British pound traded in a tight range ahead of the latest UK jobs and data and the first look at Q4 GDP this week.
In forward market today, premium for dollar decline due to mild receiving from exporters.
The benchmark six-month premium payable in June eased to 122-124 paise from 123-125 paise and the far forward December 2018 contract also moved down to 259-261 paise from 261-263 paise previously.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
K'taka remains central to Aequs' strategy, says min Patil amid row over firm's investment in TN
Bengaluru (PTI): Karnataka Commerce and Industries Minister M B Patil on Monday asserted that Aequs continues to expand in the state and that its proposed investment in neighbouring Tamil Nadu was a business decision aimed at diversification, not a shift away from Karnataka.
Reacting to criticism on social media over reports that the Karnataka-based firm had signed a major investment deal in Tamil Nadu's Krishnagiri district for setting up a specialised aerospace and defense manufacturing cluster, he said the state government was fully aware of the company's plans and remained confident about its long-term commitment to Karnataka.
"While we welcome every major investment in India, would like to clarify a few points," Patil said in a post on 'X'.
Aequs was significantly expanding its footprint within Karnataka, including a Rs 3,000 crore investment in Kolar for electronics manufacturing.
"Its recently approved Rs 1,500 crore ECMS project will also be grounded in the state. Karnataka remains central to its long-term strategy," he said.
Patil added that the government had prior knowledge of the TN proposal.
The government was already informed and aware that the TN investment is a business decision aimed at geographic diversification and de-risking operations, not a shift away from Karnataka.
"Healthy competition between states strengthens India's manufacturing ecosystem," he said.
Emphasising the state's focus on high-technology sectors, Patil said, "We remain committed to deepening Karnataka's leadership in aerospace and advanced manufacturing, and our engagement with industry partners is strong and ongoing."
The Aequs Group has pledged Rs 4,000 crore to bolster Tamil Nadu's aerospace manufacturing capabilities at the SIPCOT-Shoolagiri Industrial Park in Krishnagiri district.
The group proposes to establish a specialised aerospace and defense manufacturing cluster for the production of aircraft engines, gearbox components, and precision engineering parts. This initiative is expected to provide employment to 7,000 individuals.
