×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Rupee cuts losses tracking shares, GDP growth

Rupee cuts losses tracking shares, GDP growth
Comment E-mail Print Share
First Published: Mon, May 31 2010. 07 13 PM IST
Updated: Mon, May 31 2010. 07 13 PM IST
Mumbai: The rupee erased its intraday losses on Monday as local shares reversed falls to gain on the day after official data showed economic growth in the March quarter was broadly in line with market expectations.
India’s economy grew an annual 8.6% in the March quarter, its fastest rate in six months, broadly in line with a Reuters poll forecast, supported by government and consumer spending.
In the 2009-10 fiscal year, the economy grew a slightly better-than-expected 7.4%, from 6.7% in 2008-09.
The partially convertible rupee ended at 46.36/37, recovering from an intraday low of 46.60, and mostly steady from Friday’s close of 46.35/36. The unit had risen 1.3% last week.
“Today’s a New York holiday. Movements in the international markets have had little impact on the rupee. On Friday, we had seen the rupee rising significantly. The market is balancing that out today,” said RVS Sridhar, head of global markets at Axis Bank.
The New York market is closed on Monday for the Memorial Day holiday.
“I see the rupee in the 46.20 to 46.40 a dollar range on Tuesday and may trend towards 46.0 in the absence of great (dollar) demand,” said a senior trader with a foreign bank.
The BSE Sensex ended 0.5% higher, bolstered by the gross domestic product (GDP) data, after falling as much as 0.3% in intraday trade.
Foreign fund flows into and out of the share market are key to the rupee’s direction. So far in May, foreign investors have taken out a net $2.3 billion from shares, their biggest pullout since October 2008.
Last year, record inflows of $17.5 billion had helped the rupee gain 4.7%.
The euro inched up, paring the slight losses suffered after a cut to Spain’s sovereign debt rating, but the currency remained on the back foot as the downgrade highlighted weakness in some euro zone countries already suffering from debt problems.
Demand from refiners also hurt the rupee in the session, traders said.
Oil is India’s biggest import and refiners are the largest buyers of dollars in the domestic currency market, with their demand tending to peak at the end of each month when they make payments.
One-month offshore non-deliverable forward contracts were quoted at 46.37, close to the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX ended at 46.5425 and 46.54, respectively, with the total traded volume on the two exchanges at about $5.7 billion.
Comment E-mail Print Share
First Published: Mon, May 31 2010. 07 13 PM IST
More Topics: Markets | India | Rupee | Asia | Stocks |