Mumbai: In line with local equities, the rupee too recouped its massive initial losses but ended still lower by 20 paise to 64.24 a dollar after the trends showed the BJP will form governments in Gujarat and Himachal Pradesh.
Scripting its biggest single-day fall in the recent past, the rupee nosedived by a whopping 70 paise to 64.74 in early trade after a sense of panic and disbelief rippled through currency trading after initial trends suggested that the ruling BJP was lagging behind in Gujarat election results.
Though, the domestic currency managed to recover a major chunk of the lost ground against the dollar, the overall weak sentiment kept the rupee under continued pressure throughout the day.
The rupee had gained 30 paise to close at a fresh three- month high on Friday.
Encouraging domestic macro data along with robust capital inflows and bearish dollar undertone predominantly helped the domestic currency.
Belying concerns that lingering issues with the goods and services tax (GST) will dent outward shipments, India’s exports rose at a faster pace in November.
India’s exports rose 30.55 per cent to USD 26.19 billion in November, reversing the decline witnessed in October, while imports too grew 19.61 per cent to USD 40 billion in November from USD 33.46 billion.
The trade deficit widened to USD 13.82 billion as against USD 13.39 billion in November 2016.
The US currency traded soft against major rivals in early Asian trade amid hopes of tax reform.
After a choppy time for oil prices last week Brent crude, an international benchmark, is up 0.7 per cent at USD 63.38 per barrel.
Meanwhile, domestic bourses extended gains for the third-straight session after recovering from a early brutal fall on prospects that the BJP is set to retain power in Gujarat and elbow out the Congress in Himachal Pradesh.
The flagship Sensex jumped nearly 139 points to close at 33,601.68, while Nifty rose 56 points at 10,388.75.
Most Asian stocks ended higher largely supported by record-high Wall Street closes and hopes that US tax reform is getting closer to the statute book.
At the Interbank Foreign Exchange (forex) market, the home currency resumed weak at 64.15 against last Friday’s close of 64.04 on fresh dollar demand.
In cross-currency trades, the rupee advanced against the pound sterling to settle at 85.81 from 85.88 per pound and also strengthened against the Japanese yen to finish at 57.07 per 100 yens from 57.10 earlier. PTI