The Indian rupee was marginally up at commencement on Thursday, February 13, 2014 as huge dollar inflows after banks re-opened following a strike supported the local currency. Besides, better than expected IIP data yesterday also improved investor sentiments. The domestic currency opened higher by 5 paise at Rs 62.05 against the US dollar but dropped to a low of 62.33 so far during the day, as poor domestic equities weighed. In the spot currency market, the Indian unit was last seen trading at 62.30, down 20 paise or 0.33% as compared to previous close at 62.10.
Rupee gained for a second straight session on Wednesday after large dollar inflows hit the market following the conclusion of a two-day national banking strike on Tuesday, while a rally in global risk assets also helped sentiment.
Domestic benchmark indices slipped into the red and hit fresh intraday low in morning trade as weakness in Asian stocks dampened sentiment. Asian markets held steady near three-week highs on Thursday, as investors were cautiously optimistic after upbeat trade data from China eased concerns over the global economy and helped take some of the sting off the recent emerging markets turmoil. At the time of writing, the S&P BSE Sensex was down 83.28 points or 0.41% to 20,365.21 while the CNX Nifty was down 35.10 points or 0.58% to 6,048.90.
Inflation based on the combined consumer price index (CPI) for urban and rural India for January 2014 eased to 24-month low level at 8.79% (y-o-y), marking an deceleration from 9.87% (y-o-y) seen in previous month. Moreover, the index for December decreased to 0.43% (m-o-m) from 1% (m-o-m) seen previous month. Industrial output fell 0.6% in December 2013 over December 2012 after contracting a revised 1.3% in November. The indices of industrial production for the Mining, Manufacturing and Electricity sectors for the month of December 2013 were 0.4%, – 1.6% and 7.5% respectively.
In the global currency market, the euro nursed losses, having suffered a setback on dovish comments from a top European Central Bank official, while a surprisingly upbeat economic outlook from the Bank of England gave sterling a shot in the arm.