Rupee rebounds 13 paise to 83.27 against US dollar in early trade

Mumbai: The rupee rebounded by 13 paise to 83.27 against the US dollar in early trade on Thursday after the greenback weakened in the overseas markets as the US Federal Reserve signalled a cut in interest rates next year.

The local unit opened strong at 83.30 at the interbank foreign exchange market. The currency rose further to hit a high of 83.27 in morning deals, reflecting gains of 13 paise over the previous close.

The rupee had closed at its all-time low level of 83.40 on Wednesday after retail inflation rose to a three-month high of 5.55 per cent in November.

The US dollar index, which measures the greenback's strength against a basket of six currencies, eased by 0.33 per cent to 102.53.

The US Federal Reserve kept its key interest rate unchanged on Wednesday for a third time in a row. The officials also signalled that they expect to make three quarter-point cuts to their benchmark rate next year.

"The crash in the US 10-year yield to 4 per cent will trigger large capital flows to India. The main beneficiaries will be the large caps, particularly the fairly valued large caps in banking. IT too is likely to attract buying," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

Brent crude futures, the global oil benchmark, rose 0.28 per cent to USD 74.47 per barrel.

In the domestic equity market, the 30-share BSE Sensex jumped 778.16 points or 1.12 per cent to 70,362.76 points. The broader NSE Nifty rallied 214.75 points or 1.03 per cent to 21,141.10 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Wednesday as they bought shares worth Rs 4,710.86 crore, according to exchange data.