Mumbai: The rupee opened flat against the US dollar on Wednesday amid a rally in equity markets and moderation in retail inflation. Forex dealers said a firm greenback against major currencies and foreign capital outflow kept investors cautious in early trade. At the interbank forex, the rupee opened stronger at 79.55 against the US dollar, then turned volatile to trade in a tight range of 79.53 to 79.60. The domestic unit was trading at 79.58 against the greenback in opening deals, registering a gain of just 1 paise over the previous close.
In the previous session, the rupee had closed at an all-time low of 79.59 against the greenback. On the domestic equities front, the 30-share Sensex was trading 206.14 points or 0.38 per cent higher at 54,092.75, while the broader NSE nifty It rose 61.65 points, or 0.38 per cent, to 16,119.95.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.12 per cent to 108.20. Global oil benchmark Brent crude futures rose 0.29 per cent to $99.78 per barrel.
Retail inflation eased slightly to 7.01 per cent in June, but was above the central bank’s tolerance band for the sixth consecutive month, indicating more interest rate hikes in the future. Retail inflation in May stood at 7.04 per cent, according to government data released on Tuesday. Foreign institutional investors were net sell-offs in the capital markets on Tuesday, selling shares worth Rs 1,565.68 crore, according to exchange data.
Factory output growth hit a 12-month high of 19.6 per cent in May, up from 6.7 per cent in the previous month. Amid high levels of consumer price index-based inflation, Finance Minister Nirmala Sitharaman on Tuesday said the government is monitoring the price situation and will continue a direct attack on inflation.
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