The rupee regained 63 levels firming against the dollar to trade at 63.95 in late morning deals in the foreign exchange market on Friday. The domestic currency gained on the back of a sharp recovery in equity markets with the 30 share BSE Sensex rebounding 390 points to 26,988 intraday. The 50-share Nifty which had fallen below 8,000 levels too recovered.
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Forex dealers said that the rupee gain was entirely on the back of the gains in the equity markets. There was an anticipation that foreign investors are likely to return with the government providing some assurances on addressing their concerns over Minimum Alternate Tax.
There was optimism on crude oil prices as well as analysts said that crude prices would continue to remain subdued despite signs of firming up in 2015.
"The genesis of oil prices moving down last year was in the fact that OPEC decided to stop targeting a price just at a time when unconventional sources of oil started to come in. This maintained equilibrium in prices when there were disruptions in the Middle East due to political problems. However, with normalcy returning the supplies were restored and production flows increased substantially which led to the rapid decline in the prices," said Madan Sabnavis,chief economist, Care in a report on commodity prices.
The report said that there are hence oversupplies in the market despite an increase in demand,with large inventories, especially in the USA. "According to the World Bank, the U.S. rig count fell by half in the past five months, but oil production continues to climb by more than 1 mb/d year-on-year. OPEC production too has increased during the quarter with Saudi Arabia averaging 10 mb/d in March. The main risks remain in the areas of cutback in production by the OPEC countries and earlier than expected closure of high cost operations especially in the USA," the report added.
Source - Times Of India
www.sevagiri.com
Forex dealers said that the rupee gain was entirely on the back of the gains in the equity markets. There was an anticipation that foreign investors are likely to return with the government providing some assurances on addressing their concerns over Minimum Alternate Tax.
There was optimism on crude oil prices as well as analysts said that crude prices would continue to remain subdued despite signs of firming up in 2015.
The report said that there are hence oversupplies in the market despite an increase in demand,with large inventories, especially in the USA. "According to the World Bank, the U.S. rig count fell by half in the past five months, but oil production continues to climb by more than 1 mb/d year-on-year. OPEC production too has increased during the quarter with Saudi Arabia averaging 10 mb/d in March. The main risks remain in the areas of cutback in production by the OPEC countries and earlier than expected closure of high cost operations especially in the USA," the report added.
Source - Times Of India
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