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Daily Snapshot

* The rupee strengthened for a fourth straight session on Thursday, closing 2 paise higher at 74.16 amid a rally in equities

* The dollar index paused in the last session, a day after reverting from its support level of 91.8 and 92.0 on the back of hawkish comments by a top Federal Reserve official. Currently, market participants await new direction from Friday’s US jobs report

* On Thursday, the Nifty remained muted as it closed with a gain of just 0.25%. Broader markets continued to witness profit booking as the advance/decline ratio was in favour of bears. Looking at option data, the Nifty is likely to remain in range as 16300 Call and Put options hold significant OI

* The Bank Nifty witnessed profit booking from higher levels as it closed with a loss of 0.39%. In banking stocks, select banks like HDFC Bank, Kotak Mahindra Bank witnessed buying while rest witnessed profit booking

* Foreign institutional investors (FII) turned net buyer to the tune of | 3610 crore on August 4. They bought worth | 3466 crore in the equity market and bought worth | 144 crore in the debt market.

Rupee Outlook and Strategy

* Ahead of RBI’s monetary policy, the rupees remained subdued. However, looking at additions in ATM Call and Put strikes of US$INR, it suggests the rupee is likely to consolidate below 74.5 levels

* The dollar-rupee August contract on the NSE was at | 74.29 in the last session. The open interest remained unchanged in the August series

US$INR Strategy

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