Indian Rupee extends rally amid continued FIIs buying, lower oil prices

The Indian Rupee (INR) has extended its upward trend, driven by a continued influx of Foreign Institutional Investors (FIIs) and a decline in oil prices. On the opening trade, the USD/INR pair hit a five-month low near 93.70. Over the past few trading days, FIIs have been consistently buying Indian stocks, with a cumulative investment of Rs.

53,172.24 crore in November. India's developing economy and limited AI infrastructure, which hasn't been overly hyped, are viewed as a defensive advantage, providing better earnings visibility and stability. The recent US midterm elections have also impacted sentiment, with a political risk premium attached to AI-related assets.

A softer tone from the US administration, following President Trump's cautious stance on further military action against Iran, has contributed to investor optimism. Oil prices have plunged after Trump's remarks, and analysts at MUFG attribute the increased optimism to Washington's softer stance. The MCX Crude Oil contract, expiring on November 19, is currently trading near Rs.

8,148, close to its two-month low of Rs. 7,861. USD/INR has fallen to near 93.70, holding below the 20-day exponential moving average (EMA) at 94.69, indicating continued selling pressure. The technical analysis suggests that the pair may find support near 93.00.