Optimism in domestic and regional equities could extend support to the Indian rupee against the dollar on Monday, 10 May 2021 even as testing times for the country remain aggravated. Surging coronavirus cases add on pressure for a full lockdown in the country that is likely to dampen investor sentiments. Nevertheless, weakness in the American currency overseas, lingering at near two-month lows is expected to help rupee extend gains.

On Friday, rupee gained for the second straight day and closed 27 paise higher at 73.51 against the US dollar. At the interbank forex market, the rupee opened at 73.62 and hit an intra-day high of 73.50 and a low of 73.76. The local unit finally settled at 73.51, registering a gain of 27 paise over its previous close. During the week, the rupee gained 58 paise against the US dollar. This is the second straight week of gain for the rupee.

Domestic indices ended with decent gains on Friday amid positive global cues. The S&P BSE Sensex, rose 256.71 points or 0.52% to 49,206.27. The Nifty 50 index gained 98.35 points or 0.67% to 14,823.15. Foreign portfolio investors (FPIs) sold shares worth Rs 1,142.75 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,468.09 crore in the Indian equity market on 7 May, provisional data showed.

Overseas, Asian stocks are trading broadly higher on Monday following “a big miss” in the April U.S. jobs report. US stocks notched a record close on Friday in what proved to be a volatile day in financial markets following a much weaker than expected jobs report. The S&P 500 climbed 0.7% to 4,232.60, hitting a record high. The Dow Jones Industrial Average rose 229.23 points, or 0.7%, to 34,777.76 to reach another closing high. The tech-heavy Nasdaq Composite rose 0.9% to 13,752.24.

U.S. job growth unexpectedly slowed in April, likely restrained by shortages of workers, the Labor Department report on Friday showed. US employers hired 266,000 new workers in April, according to the labour department's monthly non-farm payrolls report, far below the level that economists had expected. The unemployment rate rose to 6.1% last month amid an escalating shortage of available workers. Meanwhile, March's originally estimated total of 916,000 was revised down to 770,000.

Meanwhile, the dollar languished near a more than two-month low versus major peers on Monday as investors continued to assess the implications for monetary policy of a disappointing U.S. employment report, ahead of inflation data this week. The dollar index, which measures the greenback against six rivals, stood at 90.178, after dipping as low as 90.128 for the first time since Feb. 26.

Powered by Commodity Insights