Rupee rises on capital inflow hopes

Rupee rises on capital inflow hopes

Mumbai: The rupee rose on Wednesday as higher local equities raised expectations of more capital inflows in Asia’s third-biggest economy and the dollar’s fall on easing of debt concerns in the eurozone underpinned sentiment.

The partially convertible rupee ended at 45.11/12 per dollar, about 0.4% stronger than its previous close of 45.30/31. It touched an intraday high of 45.08. “Positive stocks and the dollar’s fall helped the rupee towards the close of trade, but I expect the rupee to be in the range of 45.10 to 45.30 against the dollar on Thursday," said a senior trader with a foreign bank.

The BSE benchmark Sensex ended 0.3% higher. Foreign investors have invested a net $6.1 billion in the Indian stock markets so far in 2010, adding to the record capital inflows of $17.5 billion in 2009.

The robust inflows have helped the rupee gain more than 3% this year, after rising 4.7% last year.

The euro edged up against the dollar as debt concerns eased and Spain announced public spending cuts after the European Union (EU) and IMF unveiled a $1 trillion emergency aid package on Monday to prevent eurozone debt crisis from spreading.

The index of the dollar against six major currencies was mostly flat.

One-month offshore non-deliverable forward contracts were at 45.17/27, weaker than 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 45.1650 and 45.16 respectively, with the total traded volume on the two exchanges at about $8.6 billion.