Indian Rupee settles 34 paise higher at 71.56 against US dollar

It was a positive day for Indian rupee, which recovered by 34 paise to close at 71.56 against the US dollar. At the Interbank Foreign Exchange, the rupee opened higher at 71.84 a dollar and then touched a high of 71.51. The domestic unit, however, pared some gains and settled the day up by 34 paise at 71.56 a dollar.

According to reports, forex market sentiments were driven by the country's narrowing trade deficit in November as also smart gains in domestic equities. The American currency's weakness against its major rivals globally also helped the rupee further its gains. Earlier on Friday, the domestic unit had dropped by 22 paise to close at 71.90 against the US dollar. 

Union commerce ministry data today stated that India's trade deficit has come down to USD 16.67 billion in November 2018, from USD 17.13 billion in October this year. 

Forex dealers reportedly attributed the rupee gains to the greenback's weakness against some currencies overseas and improving macro picture in form of narrowing trade deficit numbers. They further stated that heavy buying in domestic equities also helped trading sentiments in the forex market.

Meanwhile, equity benchmark Sensex today continued its winning streak for a fifth straight session, rising over 307 points. It witnessed gains mainly in auto, metal and financial stocks as investors maintained their bullish stance in view of strengthening rupee, narrowing trade deficit and sustained foreign fund inflows. 

The 30-share BSE Sensex closed at 36,270, showing a rise of 0.85 per cent or 307 points. In the intra-day trade, the gauge hit a high of 36,312. The Sensex had climbed 1,003.21 points in the previous four sessions.

Similarly, the broader NSE Nifty closed at 10,888, a gain of 0.77 per cent or 83 points, after shuttling between 10,900.35 and 10,844.85. 

On a net basis, foreign portfolio investors (FPIs) bought shares worth Rs 861.94 crore Friday, while DIIs sold equities to the tune of Rs 303.52 crore, provisional data showed.