Mumbai

The Indian rupee strengthened by 15 paise against the US dollar in early trading on Tuesday, supported by improved investor sentiment after Saudi Arabia sharply reduced crude oil prices for Asian buyers and geopolitical tensions in the Middle East eased.

The domestic currency opened at 95.33 against the US dollar in the interbank foreign exchange market and later advanced to 95.28, recovering 15 paise from Monday's closing level of 95.43.

According to forex market participants, easing tensions in the Middle East and reduced risk surrounding the Strait of Hormuz helped keep global crude oil prices relatively subdued, providing support to the rupee.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said Saudi Arabia's decision to reduce August crude prices for Asia by USD 11 per barrel—the steepest cut in nearly 26 years—was a positive development for the Indian currency.

However, he noted that demand for dollars remained firm as Indian state-run refiners, including Indian Oil Corporation and HPCL, had reportedly floated tenders to purchase around seven million barrels of crude oil.

The US dollar index, which measures the greenback against a basket of six major global currencies, was trading marginally higher at 100.86.

Brent crude futures, the international oil benchmark, rose 0.64 per cent to trade at USD 72.45 per barrel.

Oil prices edged higher despite Saudi Arabia's aggressive price reductions after fresh security concerns emerged in the Strait of Hormuz. Reports indicated that a tanker travelling near the strategic waterway was struck by a projectile off the coast of Oman, triggering a fire, though no casualties were reported.

In the domestic equity market, benchmark indices opened in positive territory. The BSE Sensex gained 176 points to reach 78,461.16, while the NSE Nifty rose 34.1 points to 24,464.45.

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Foreign Institutional Investors (FIIs) remained net buyers on Monday, purchasing equities worth Rs 243.03 crore, according to stock exchange data.