Indian rupee gains on oil, stocks rise helps

Indian rupee gains on oil, stocks rise helps
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First Published: Mon, Aug 11 2008. 10 35 AM IST
Updated: Mon, Aug 11 2008. 10 35 AM IST
Mumbai: The Indian rupee firmed on Monday as soft oil prices eased expectations for a wider trade deficit, while gains in the local share market raised hopes for foreign fund inflows.
At 10:10 a.m (0440 GMT), the partially convertible rupee was at 41.94/95 per dollar, 0.3% stronger than 42.065/075 on Friday. It had hit 41.82 in late July, its highest since 12 May.
“The rupee is stronger mainly on lower oil and gains in local shares but there is strong support for the dollar at 41.90, which should hold the rupee in a range of 41.90 to 42.10,” a senior dealer with a private bank said.
“However, if the rupee breaks 41.90, then we may see it rising to 41.75 - 41.65,” he added.
Oil prices hovered above $116 per barrel, after having fallen to a three-month low of $114.90 on Friday, but is well off a record $147.27 hit in mid-July.
India imports nearly 70% of its oil and high prices widen its trade deficit, pressuring the local unit downward.
The BSE share index opened 1.7% higher and extended gains to more than 2%, but analysts said there may be resistance after the benchmark climbed by more than a fifth in less than a month.
Foreigners have bought Indian shares worth $231 million in August after selling more than $250 million in July, helped by the fall in oil prices.
One-month offshore non-deliverable forward contracts were quoting at 42.11/21 per dollar, weaker than the onshore rate.
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First Published: Mon, Aug 11 2008. 10 35 AM IST
More Topics: Markets | India | Rupee | Dollar | Exchange Rate |