BackRupee rises a sixth day as funds resume buying stocks
Rupee rises a sixth day as funds resume buying stocks
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Mumbai: The rupee climbed to a one-month high after overseas investors increased holdings of local equities for a second straight day.
The currency advanced for a sixth day, its best run in a year, on optimism US president-elect Barack Obama will bolster measures to overcome a recession in the world’s biggest economy. The Bombay Stock Exchange’s benchmark index, Sensex, has rebounded 19% from a three-year low reached on 27 October, while the stock market regulator said global investors purchased a net $482.1 million of Indian shares on 31 October and 3 November.
“The optimism among investors is beginning to settle deeper as reflected by the equity markets," said P.V. Rao, a currency trader at IndusInd Bank Ltd in Mumbai. “We will see very soon a return of investments into India which will benefit the rupee."
The rupee gained 0.6% to 47.435 per dollar in Mumbai, the strongest since 3 October, according to data compiled by Bloomberg. It touched 46.73 in intraday trading.
The currency touched a record low of 50.29 on 27 October as the global financial crisis nudged the US and Europe towards a recession, causing foreign investors to flee riskier emerging markets. The currency pared gains after the Sensex declined 4.8% on Wednesday.
Asian stocks gained as Obama’s victory in the US presidential elections sparked optimism his spending plans will help ease the global credit crisis.
Prime Minister Manmohan Singh sought to strengthen ties with the next administration after President George W. Bush pushed for the successful conclusion of a civilian nuclear energy agreement between the two nations.
Offshore forward contracts show traders have pared bets for how much they predict the rupee will depreciate over the next month, showing an implied rate of 47.88 a dollar compared with 48.13 on Tuesday. Forwards are agreements in which assets are bought and sold at current prices for future delivery.
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