The rupee strengthens by 7 paise, concluding at 83.33 against the dollar, with diminished concerns over rate hikes.

On Thursday, the Indian rupee staged a recovery from its historic lows, closing at 83.33 against the US dollar, marking a gain of 7 paise. This upturn was attributed to the weakening of the greenback in global markets, as indications from the US Federal Reserve suggested a halt in rate hikes.

The domestic equities market experienced a robust rally fueled by substantial foreign fund inflows, further bolstering positive sentiment around the rupee. However, the gains were somewhat curtailed by state-run banks engaging in dollar buying and an uptick in oil prices, as noted by forex traders.

Opening at 83.30 against the previous close of 83.40, the rupee's performance at the interbank foreign exchange market reflected a strengthening trend. The US Federal Reserve's decision to maintain its key interest rate for the third consecutive time, coupled with their signal of anticipating three quarter-point cuts to the benchmark rate in the coming year, contributed to the positive outlook for the rupee.

Analysts, such as VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed to the expected large capital flows to India following the decline in the US 10-year yield to 4 percent. This influx of capital is anticipated to benefit large-cap stocks, particularly those in the banking sector, and could also drive buying activity in the IT sector.

Meanwhile, in the global oil market, Brent crude futures, the benchmark for global oil prices, witnessed a 2.11 percent increase, reaching USD 75.83 per barrel. On the domestic front, the 30-share BSE Sensex soared by 929.60 points, settling at an all-time high of 70,514.20, while the Nifty, comprising 50 issues, climbed 256.35 points to reach a record level of 21,182.70.

Foreign Institutional Investors (FIIs) contributed to the positive market sentiment, being net buyers on Wednesday and acquiring shares worth Rs 4,710.86 crore, according to exchange data. The combination of these factors shaped the currency and financial landscape on Thursday, reflecting both domestic and global economic dynamics.