MUMBAI, Feb 2 Reuters The Indian rupee is expected to open stronger on Thursday, as markets perceived the U.S. Federal Reserve to be a bit dovish, with investors keeping an eye on domestic equities after late developments in the Adani saga.

The rupee was seen around 81.70 per U.S. dollar in early trades, compared with its previous close of 81.92. It could move in an 81.5082 band through the session, said traders.

The local currency mirrored the volatility in equities in the previous session, as both markets gave up their postbudget gains once the Adani Group shares resumed their decline.

Indian stocks, down about 2.8 since last Wednesday, will be watched further after the Adani Group39;s overnight withdrawal of its followon public offer.

Despite dollar weakness and positive risk sentiment, the rupee could come under pressure due to the Adani Grouprelated developments as equity futures point to a weak start, said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

The dollar could be bought initially, and along with foreign investor outflows from equities, could see the rupee fall to 82levels, he added.

Foreign institutional investors withdrew around 3.5 billion from stock markets in January alone.

Meanwhile, the dollar index fell over a percent and Treasury yields declined after the Fed raised rates by an expected 25 basis points and Chair Jerome Powell acknowledged inflation was slowing down.

However, he did signal that interest rates would continue…