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Rupee gains for 2nd week as equities, fund purchases climb

Rupee gains for 2nd week as equities, fund purchases climb
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First Published: Fri, Dec 07 2007. 11 38 PM IST
Updated: Fri, Dec 07 2007. 11 38 PM IST
New Delhi: The rupee gained for the second week on speculation overseas funds will increase holdings of equities after the benchmark stock index climbed above 20,000 for only the seventh time in its history.
Record stock purchases by global investors helped push the currency to the strongest in almost a decade last month. Money managers based abroad are chasing higher returns in the South Asian country, which is expanding at the second fastest pace among the world’s 20 major economies. The rupee is also set for the biggest annual gain since at least 1974.
“The rupee has some more strength left in the immediate term,” said Sudarshan Bhatt, chief currency trader at state- owned Corporation Bank in Mumbai. “Now we need to watch if investors will pull out to book profit before the year ends. The rupee should broadly trade in a range.”
The rupee strengthened 0.5% this week to 39.405 against the dollar in Mumbai, adding to last week’s 0.2% advance, according to data compiled by Bloomberg. The closing level on Friday is the highest since 21 November.
The currency, the best performer in Asia this year after the Philippine peso, may trade between 39.30 and 39.70 this month, Bhatt said.
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First Published: Fri, Dec 07 2007. 11 38 PM IST