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Daily Snapshot

* The rupee marginally recovered on the back of a fall in dollar index and US bond yields

* The dollar index gave away part of last Friday’s gains and went back to 92 levels at the beginning of the week. This week’s US jobs data is now keenly awaiting for the direction of the dollar index

* The Nifty crossed its two month long consolidation range as it closed at all-time high with a gain of more than 1.50%. Advance/ decline ratio was in favour of bulls. Looking at options data, 15900 and 16000 Put option witnessed significant OI addition, which indicates that downside would be limited

* On Wednesday, the Bank Nifty started the day on a dull note but as the day progressed it gained strength and ended with a gain of more than 1.35%

* Foreign institutional investors (FII) turned net sellers to the tune of | 1081 crore on August 2. They sold worth | 1488 crore in the equity market and bought worth | 407 crore in the debt market.

Rupee Outlook and Strategy

* The rupee is expected to maintain its trading range between the level of 74.20 and 74.70 as further additions were seen in ATM Call, Put strikes of US$INR, which indicates consolidation around these levels

* The dollar-rupee August contract on the NSE was at | 74.44 in the last session. The open interest is almost unchanged for the August series

US$INR Strategy

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