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Rupee rises tracking gains in shares

Rupee rises tracking gains in shares
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First Published: Fri, Oct 23 2009. 07 08 PM IST
Updated: Fri, Oct 23 2009. 07 08 PM IST
Mumbai: The rupee, which fell over the week after showing a net rise for six straight weeks, snapped a two-day fall to strengthen on Friday as a rise in local share prices raised expectations of more capital inflows.
The partially convertible rupee ended at 46.50/51 per dollar, off an intraday high of 46.40, and about 0.5% stronger than its close of 46.735/745 on Thursday, when it had dropped as low as 46.82, its lowest since 7 October.
“A positive close for equities helped sentiment. But outlook for local equities is still uncertain,” said a trader with a foreign bank.
Indian shares posted their biggest weekly fall in 11 weeks, but rose 0.1% on Friday, as global stocks climbed on robust corporate earnings.
Foreign funds, who have been net buyers of a net $14 billion worth of Indian stocks so far in 2009, following net sales of more than $13 billion last year, are a key factor in determining the rupee’s fortunes.
Traders said some dollar buying by refiners capped the rupee’s gains. Oil, which rose to a year-high of $82 a barrel this week is India’s largest import and refiners are the biggest buyers of dollars in the local market.
One-month offshore non-deliverable forward contracts were quoting at 46.56/66, weaker than the onshore rate. In currency futures, the active near-month contracts on the National Stock Exchange and MCX-SX were at 46.5175 and 46.5075 respectively, stronger than Thursday’s 46.76.
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First Published: Fri, Oct 23 2009. 07 08 PM IST
More Topics: Rupee | Dollar | Currency | Shares | Markets |