Rupee retreats from 1-month high on weak shares

Rupee retreats from 1-month high on weak shares

Mumbai: The Indian rupee retreated from fresh one-month highs on Friday afternoon as weak domestic shares weighed on sentiment but the dollar’s defensiveness against major currencies continued underpin sentiment.

At 2:10pm, the partially convertible rupee was at Rs46.49/50 per dollar, after hitting Rs46.41, its strongest since 30 June and marginally stronger than Thursday’s close of Rs46.53/54.

Dealers said losses in domestic shares pulled the rupee off day’s highs. Shares were trading down 0.5% after disappointing earnings from Oil and Natural Gas Corp and Hero Honda Motors, and weak global cues.

Traders said some last minute month-end dollar buying from oil refiners and importers was also seen.

Oil is India’s largest import and refiners are the biggest buyers of dollars in the local currency market with their demand tending to peak at the end of each month when they make payments.

Gains in most other regional peers however supported sentiment. The dollar fell to an eight-month low against the yen on Friday, hurt by selling from Japanese exporters and concerns that US GDP data would add to signs of fading momentum for the US economic recovery.

The index of the dollar against six major currencies was little changed and would be watched for cues.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at Rs46.7150, with the total traded volume on the two exchanges at about $2.5 billion.