Rupee gains 7 paise versus the dollar to close at 83.33 as concerns about a rate hike fade.
The rupee's sentiment was further enhanced by a spectacular surge in domestic equities that was fueled by foreign fund inflows.
The rupee rose 7 paise to close at 83.33 against the US dollar on Thursday, recovering from all-time lows as the US dollar lost strength in foreign exchange markets due to indications that the US Federal Reserve would no longer be raising interest rates.
The rupee's sentiment was further enhanced by a spectacular surge in domestic equities that was fueled by foreign fund inflows. Nevertheless, rupee gains were limited, according to forex dealers, by dollar purchases by state-run banks and an increase in oil prices.
The rupee opened strongly at 83.30 on the interbank foreign exchange market, up from the previous close of 83.40, which was its lowest closing value against the US dollar.
In the day trade, the rupee fluctuated within a narrow range of 83.35 and 83.27. At 83.33, it closed, up 7 paise from the previous close.
The strength of the US dollar relative to a basket of six other currencies is gauged by the US dollar index, which decreased by 0.32 percent to 102.54.
For the third consecutive meeting, the US Federal Reserve held its benchmark interest rate steady on Wednesday. Additionally, the officials hinted that they anticipate lowering their benchmark rate by three quarter points the following year.
The US 10-year yield's collapse to 4% will result in significant capital flows to India. Large caps, especially the fairly valued ones in banking, will be the main winners. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, IT is also likely to draw purchases.
The benchmark for global oil, Brent crude futures, increased 2.11 percent to USD 75.83 per barrel.
The 30-share BSE increased 929.60 points to close at an all-time high of 70,514.20 in the domestic equities market. The 50-issue Nifty reached a record high of 21,182.70, up 256.35 points.
According to exchange data, Foreign Institutional Investors (FIIs) purchased shares worth Rs 4,710.86 crore on Wednesday, making them net buyers in the capital market.
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