Stock markets in India are presently trading marginally higher. Sectoral indices are trading on a mixed note with stocks in the IT sector and energy sector witnessing maximum buying interest. Telecom stocks are trading in the red.
The BSE Sensex is trading up 122 points (up 0.4%) and the NSE Nifty is trading up 35 points (up 0.4%). The BSE Mid Cap index is trading up by 0.3%, while the BSE Small Cap index is trading up by 0.4%. The rupee is trading at 64.30 to the US$.
In the news from currency markets, the dollar is witnessing selling pressure today. Most of the losses are seen on the back of the ECB meet, where European Central Bank chief Mario Draghi said that no exact date had been set for discussing any changes to the ECB’s ultra-easy monetary policy. The comments meant losses for dollar against the euro currency.
The dollar also traded on a negative note against the rupee this week. It opened its session lower on the back of weak global cues and continued to witness losses during the start of the week. During the end of the week, the dollar continued its downtrend and ended its session in the red.
Dollar Extend Losses
One must note that the rupee is witnessing buying interest of late. The appreciation in the rupee comes as a welcome breather for importers in India. A softer rupee helps importers to buy goods and services at a cheaper rate. This is vital for a developing economy that relies heavily on imports. This bodes well for the Indian economy as higher imports normally mean increased economic activity.
But on the other hand, the rise in rupee can spell trouble for exporters. The exporters are at a disadvantage owing to the currency appreciation as this renders their produce expensive in the international markets as compared to other competing nations whose currencies haven’t appreciated on a similar scale. This tends to take away a part of the advantage from Indian companies, which they enjoy due to their cost competitiveness.
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