Rupee trades strong on firm shares; peers

Rupee trades strong on firm shares; peers

Mumbai: The Indian rupee continued to trade stronger in afternoon session on Monday boosted by firm domestic shares and gains in other regional peers following a return in risk-taking globally after strong economic data.

At 2:30pm, the partially convertible rupee was at Rs46.35/36 per dollar, after touching Rs46.2650 earlier, its highest since 10 August. It had closed at Rs46.47/48 on Thursday. Markets were closed on Friday for a local holiday.

India’s industrial output accelerated much faster than expected in July on surging capital goods production, strengthening the case for further monetary tightening by the central bank to tame near double-digit inflation.

Dealers said gains in the euro and other Asian peers also boosted sentiment for the rupee. Almost all Asian currencies were stronger compared to the dollar. The index of the dollar against six majors was down 0.7%.

The euro jumped against the dollar on Monday as relief at new global banking regulations and upbeat Chinese data lifted investor appetite for currencies seen as higher-risk.

Indian shares extended gains to more than 2% on Monday afternoon, riding on better-than-expected jump in factory output locally and firm world equities.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were at Rs46.45 and 46.4525 respectively, with the total traded volume on the two exchanges at about $3.8 bn.