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Rupee recovers 12 paise to close at 77.32 against US dollar

MUMBAI: Snapping its two-day losing streak, the rupee appreciated 12 paise to end at 77.32 (provisional) against the US dollar on Tuesday, supported by a rebound in regional currencies and fall in crude oil prices.

However, weak domestic equities and persistent foreign fund outflows restricted the gains, forex traders said.

At the interbank forex market, the rupee opened strong at 77.27 against the greenback and moved in a range of 77.20 to 77.45 in the day trade. The rupee finally ended at 77.32, 12 paise higher than its previous close.

In the previous session, the rupee had slumped 54 paise to close at a record low of 77.44 against the US dollar.

"The rupee recovered some lost ground after touching a life low of 77.53 on Monday. Rebound in risk assets and stronger regional currencies supported the rupee in today's session.

"Some stabilisation in risk sentiment after a few days' sell-off could help the local currency while rebound crude oil prices and fund outflows could adversely impact the rupee," said Dilip Parmar, Research Analyst, HDFC Securities.

The backdrop of Fed tightening, growth concerns and an unstable risk environment augur well for the greenback. However, short-term profit booking cannot be ruled out in the dollar index, as it has been facing stiff resistance at around 104, he added.

On the domestic equity market front, the BSE sensex ended 105.82 points or 0.19 per cent lower at 54,364.85, while the broader NSE Nifty fell 61.80 points or 0.38 per cent to 16,240.05.

Brent crude futures, the global oil benchmark, fell 1.15 per cent to $104.72 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 103.68.

Foreign institutional investors remained net sellers in the capital market on Monday, as they offloaded shares worth Rs 3,361.80 crore, as per stock exchange data.