Rupee Gains on Domestic Market Rebound and BJP's Haryana Win

The rupee strengthened by 3 paise to close at 83.97 against the US dollar, buoyed by a rebound in domestic equity markets and BJP's electoral victory in Haryana. A weaker dollar further supported the rupee. Despite gains, rising crude prices and foreign fund outflows limited further appreciation.

The Indian rupee appreciated by 3 paise to settle at 83.97 against the US dollar on Tuesday, as domestic equity markets recovered after six straight sessions of losses. The BJP's success in the Haryana assembly elections and the weakening of the dollar against major currencies provided a boost to the rupee, according to forex traders.

However, experts noted that a rise in crude oil prices and continuous outflow of foreign funds restrained more significant gains. Anuj Choudhary, a Research Analyst at Sharekhan by BNP Paribas, stated that the rupee's uptrend was supported by positive domestic markets, defying downbeat global markets.

RBI's upcoming monetary policy announcement added to investors' cautiousness. While expectations are for the RBI to hold its stance, the rupee is anticipated to trade in a range influenced by foreign investor activity and geopolitical tensions. Meanwhile, domestic equity benchmarks Sensex and Nifty revived, reflecting investor optimism.

(With inputs from agencies.)