Rupee ends up as euro aids; shares, oil cap gains

Rupee ends up as euro aids; shares, oil cap gains

Mumbai:The rupee ended stronger on Monday supported by the euro’s gains against the dollar, but surging oil prices put a lid on further appreciation and choppy domestic shares provided little direction.

The partially convertible rupee closed at 45.0050/0150 per dollar, 0.3% stronger than Friday’s close of 45.13/14. It traded in a range of 45.000-45.0900 intraday.

“Positives outweigh the negatives in the near-term (seven days). The immediate-term bias is for the rupee appreciating into 44.85-44.90," said J. Moses Harding, head of global markets at IndusInd Bank.

“Euro/dollar going to $1.4300/4500 can push the rupee to 44.80 ... and a huge premium for forward dollars will keep the forward segment in a supply-driven mode. Near-term large ticket IPO/FPO supplies is also a positive," he said.

The euro/dollar was trading at $1.4167 at the close of the local forex trade, after hitting a four-month high of $1.4184. The common European unit had been around $1.4125 at end of local trade on Friday.

The index of the dollar against six major currencies was down 0.12% to 76.596 during the close of the local market.

Oil prices rose by $2 a barrel on Monday as a wave of UN-mandated airstrikes on Libya and proliferating unrest in the Middle East fanned concerns about oil supply from the region.

Oil is India’s biggest import and domestic oil refiners are biggest dollar purchasers in the local forex market.

Shares edged 0.2% higher in choppy trade on Monday, taking cues from higher Asian peers, but the rise was limited as firm oil prices weighed on investor sentiment. Financials led the gains.

The one-month onshore forward premium was at 31.50 points, lower than Friday’s close of 33.50, while the three-month premium was at 82.25 points versus its previous close of 83.50 and the one-year was stable at 288.50.

The one-month offshore non-deliverable forward contracts were quoted at 45.30, weaker than the onshore spot rate.

In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were at 45.0950, 45.0850 and 45.0925 respectively, with the total traded volume at about $6.4 billion.