Rupee rises 15 paise to 95.28 against US dollar in early trade

The Indian rupee strengthened 15 paise against the US dollar in early trade, supported by improved market sentiment after Saudi Arabia cut crude prices for Asia. Easing Middle East tensions, lower oil prices and renewed foreign investor buying also boosted the currency

Mumbai: The rupee appreciated 15 paise to 95.28 against the US dollar in early trade on Tuesday on improved market sentiment after reports that Saudi Arabia has slashed August crude oil prices for Asia amid easing of geopolitical tensions in the Middle East.

Forex traders said lower Middle East risk premium and higher traffic from the Strait of Hormuz kept the oil prices lower.

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At the interbank foreign exchange market the rupee opened at 95.33 and later touched 95.28 against the American currency, registering a gain of 15 paise from its previous close.

On Monday, the rupee had settled at 95.43 against the US dollar.

The positive factor for the Indian rupee was Saudi Arabia slashing Asia oil prices by USD 11 per barrel in a record cut in the last 26 years amid improving supply conditions, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Bhansali further noted that the buying by Indian oil companies also was indicated by the fact that Indian Oil and HPCL had placed tenders to buy 7 million barrels of crude thus keeping the US dollar well bid in the last few days.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.86, up 0.01 per cent.

Brent crude, the global oil benchmark, was trading higher by 0.64 per cent at USD 72.45 per barrel in futures trade.

Meanwhile, Brent oil prices are trading higher as renewed security concerns in the Strait of Hormuz have offset expectations of strong global crude supplies following Saudi Arabia’s steep cuts for Asian buyers.

A tanker transiting near the Strait of Hormuz was reportedly struck by a projectile off the coast of Oman, causing a fire but no casualties.

On the domestic equity market front, the Sensex advanced 176 points to 78,461.16 in opening trade, while the Nifty was up 34.1 points to 24,464.45.

Foreign Institutional Investors purchased equities worth Rs 243.03 crore in the domestic equity market on Monday, according to exchange data.