Rupee up on rebound by global equities

Rupee up on rebound by global equities
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First Published: Fri, Aug 03 2007. 11 59 PM IST
Updated: Fri, Aug 03 2007. 11 59 PM IST
The rupee gained this week as a recovery in global equities spurred speculation that overseas funds will increase purchases of local shares.
The best performer among the 10 most actively traded currencies in Asia outside of Japan this year, the rupee is near the highest in nine years as the benchmark stock index touched a record last week. Net purchases of Indian shares by overseas investors this year surpassed those in 2006, according to the Securities & Exchange Board of India (Sebi), the stock market regulator.
“With the rebound in the equity market, we can expect resumption in capital flows into the country,” said Roy Paul, assistant general manager of treasury at Federal Bank Ltd in Kochi. “The pressure on the rupee to appreciate is likely to return.” The rupee gained 0.4% this week to 40.3525 versus the dollar in Mumbai, according to Bloomberg data. It advanced in all, but three of the past 22 weeks. It may reach 40.25 in the coming days, he said.
The Bombay Stock Exchange’s Sensex on Friday added 1%, its second day of gains, following the biggest slump in four months, according to Bloomberg data. Global funds were net sellers for three of the four days through 1 August. They bought a net $10 billion (Rs40,400 crore) of Indian stocks this year as of 1 August, compared with $7.99 billion in 2006, according to data provided by Sebi
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First Published: Fri, Aug 03 2007. 11 59 PM IST
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