In early trading, the Indian Rupee has surged by 38 paise to reach 82.75 against the US dollar. This rise is attributed to India's inclusion in the JPMorgan bond index, a development that has bolstered investor confidence.
Forex traders note that JPMorgan Chase & Co's decision to incorporate Indian government bonds into its benchmark emerging-market index is expected to have significant implications for India's debt market and global investors.
At the interbank foreign exchange, the rupee initiated trading at 82.75, marking a 38 paise gain from its previous close.
On the preceding day, the rupee had maintained a narrow range and closed 2 paise lower at 83.13 against the US dollar.
Market observers believe that India's inclusion in a prominent global bond index will attract greater foreign investment to the country's debt market.
"The rupee has strengthened due to India's inclusion in the JPMorgan bond index, appreciating by approximately 0.42% in the NDF markets and reaching levels around 82.80," commented Amit Pabari, Managing Director of CR Forex Advisors. He further anticipates this positive trend to persist in the onshore market, potentially pushing the rupee towards 82.50 in upcoming sessions after surpassing the 82.80 level. However, Pabari also notes that the rupee's upward movement may be capped between the 83.25-83.30 range due to significant RBI intervention.
In parallel, the dollar index, which measures the US dollar's strength against a basket of six major currencies, increased by 0.12% to reach 105.48.
Brent crude futures, the global benchmark for oil, recorded a 0.61% gain, reaching $93.87 per barrel.
On the domestic front, the 30-share BSE Sensex exhibited a minor increase of 22.14 points (0.03%) to reach 66,252.38 points. In contrast, the broader NSE Nifty experienced a marginal decrease of 3.65 points (0.02%) to settle at 19,738.70.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on the preceding day, selling shares worth Rs 3,007.36 crore, according to exchange data.
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