US to India from sanctions on Iranian oil imports, the Indian rupee and the stock markets witnessed a sharp rally. While the rupee clocked its biggest intra-day gain of more than 100 paise or 1.37 per cent against the US dollar in over last five years, the benchmark indices at BSE and NSE jumped nearly 1.7 per cent.

Both the rupee and the equity markets have also received support from decline in Brent crude oil prices over the last few days as it allays market concerns over widening current account deficit and pressure on the economy. While the Brent crude prices fell nearly 3 per cent on Friday, over the last one-month the Brent crude oil prices have declined by over 15 per cent, thereby taking off some pressure from rupee.

Over the last two trading sessions rupee has gained 152 paise against the dollar from a closing of 73.96 on Wednesday to a closing at 72.44 on Friday. In fact, over the last three trading sessions, the benchmark Sensex has gained 1,120 points or 3.3 per cent. The Sensex and Nifty have gained 5 per cent over during the week.

“Trading sentiment got a boost amid a fall in global crude prices and rising rupee. Positive global cues also triggered buying. In the global commodities markets, Brent for January 2019 settlement was off 18 cents at $72.71 a barrel. The contract had fallen $2.15 a barrel or 2.87 per cent to settle at $72.89 a barrel during the previous trading session,” said Abhijeet Dey, senior fund manager-equities at BNP Paribas Mutual Fund.

At the Interbank Foreign Exchange (Forex) market, the domestic unit Friday opened on a higher note at 73.14, then gained further ground and touched an intra-day high of 72.43, a jump of 102 paise. It, however, closed at 72.45 against the greenback, showing a rise of 100 paise the best day for the Indian unit since September, 2013.

The last time rupee gained in excess of Rs 1 against a dollar was on September 19, 2013 when it gained 161 paise against the dollar. It had jumped 225 paise against the dollar on August 29, 2013 after the Reserve Bank of India said that PSU oil companies could buy dollars through a special swap window.

On Friday, reports suggested that the Trump administration is considering granting waivers to India and some other countries, which will allow these nations to continue buying oil from Iran, despite the renewal of US sanctions from next week. Earlier, US had told various countries, including India, to cut oil imports from the Iran to “zero” by November 4 or face sanctions.

In the equity markets, the benchmark Sensex and Nifty indices jumped in line with the Asian and European markets that jumped between 0.5 and 4.2 per cent. While the Dax in Germany was up 1.2 per cent, the hang Seng in Hong Kong and Nikkei in Japan were up 4.2 per cent and 2.6 per cent, respectively.