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Rupee appreciates on NTPC FPO, higher stocks

Rupee appreciates on NTPC FPO, higher stocks
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First Published: Wed, Feb 03 2010. 06 26 PM IST
Updated: Wed, Feb 03 2010. 06 26 PM IST
Mumbai: The rupee strengthened through 46 per dollar on Wednesday to its highest in nearly two weeks on foreign investor inflows for share sale by state-run firm and a broad rally in stocks.
The partially convertible rupee ended at 45.97/98 per dollar, off a peak of 45.94, its highest since 21 January, but still 0.5% stronger than its 46.22/23 close on Tuesday.
The BSE benchmark Sensex rose 2.1%, its biggest gain in six weeks coming a day after it had fallen to its lowest close in three months, supported by stronger world markets. “The stock market rally supported sentiment, but the main factor remained money pouring in for NTPC’s public issue,” said a senior trader with a foreign bank.
State-run NTPC Ltd, India’s largest power producer, opened a follow-on public offer (FPO) share sale on Wednesday to raise at least $1.8 billion. The issue closes on 5 February.
Foreign fund investments in local shares are a key driver for the rupee. Foreign investors have been net sellers of nearly $2 billion worth of stocks in 12 of the last 14 trading sessions.
The euro’s gains versus the dollar also helped sentiment. The single currency held gains against the dollar after the European Commission backed a Greek deficit-cutting plan.
One-month offshore non-deliverable forward contracts were quoted at 45.97/99, little changed from 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 46.0450 and 46.0425 respectively.
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First Published: Wed, Feb 03 2010. 06 26 PM IST
More Topics: Rupee | Dollar | Currency | Foreign Exchange | Markets |