Rupee up amid hopes for parliament nod to FDI in retail

MUMBAI Tue Dec 4, 2012 5:30pm IST

Rupee notes are seen in this picture illustration taken in Mumbai April 30, 2012. REUTERS/Vivek Prakash/Files

Rupee notes are seen in this picture illustration taken in Mumbai April 30, 2012.

Credit: Reuters/Vivek Prakash/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - The rupee strengthened for a fourth session in five on Tuesday as investor hopes for a parliamentary approval to foreign direct investment in multi-brand retail grew a day ahead of the impending vote.

The parliament began debate on FDI in multi-brand retail earlier in the day with both houses due to vote on the reform on Wednesday.

"If FDI in retail goes through, we may see 54 levels on the rupee or else we are likely to head below 55," said Uday Bhatt, a foreign exchange dealer with UCO Bank.

"If there is an increase in foreign institutional investment limit in government bonds as speculated, we will see a further upside," he added, predicting a 54.50 to 54.95 range for the rupee until the vote on Wednesday.

The government is considering a proposal to raise the ceiling on foreign investments in government and corporate bonds by $5 billion each, a senior finance ministry official said, as the country looks to increase vital capital flows.

The partially convertible rupee closed at 54.68/69 per dollar versus its previous close of 54.77/78.

Traders said heavy dollar demand from a technology firm in early trade had hurt the rupee, pushing it to the day's low of 54.96, but a decline in demand later in the session and improvement in domestic shares helped the rupee recover.

Some traders said the firm was Mphasis, an Indian IT services and back-office support provider and a unit of Hewlett-Packard Co (HPQ.N), which had agreed to buy U.S.-based Digital Risk LLC, a mortgage management specialist, for $175 million on Monday.

Some dollar demand from oil firms, the largest buyers of the greenback in the domestic currency market, also hurt the rupee.

The BSE Sensex edged higher, rising for the fifth day in the last six sessions, led by gains in Reliance Industries (RELI.NS), on hopes the government will soon approve the company's investment plans for the KG-D6 block.

Foreign funds have bought more than $20 billion worth of domestic shares so far this year and bought debt worth more than $6 billion.

In the offshore non-deliverable forwards, the one-month contract was at 54.97, while the three-month contract was at 55.49.

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 all closed at around $54.8975 with a total traded volume of $5.20 billion.

(Editing by Prateek Chatterjee)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Iron Ore Mining

REUTERS SHOWCASE

Tracking Markets

Tracking Markets

Sensex, Nifty surge to record high; Sesa gains  Full Article 

Rupee Falls

Rupee Falls

Rupee sees worst single-day fall in over a month  Full Article 

TCS-Mitsubishi

TCS-Mitsubishi

TCS, Mitsubishi to form software services company  Full Article 

Deal Talk

Deal Talk

Hero Motor to invest $40 million in Bangladesh joint-venture   Full Article 

Telecom Sector

Telecom Sector

RIL telecoms unit in tower lease pact with ATC  Full Article 

Japanese Economy

Japanese Economy

Japan exports growth slows sharply, keeps pressure on BOJ to act  Full Article 

A Tough Sell

A Tough Sell

Insurance against a China financial crisis  Full Article 

Tyre Debris

Tyre Debris

Bangalore-bound Malaysia Airlines plane turns back after tyre burst on takeoff  Full Article 

Digital Currency

Digital Currency

At Mt. Gox bitcoin hub, 'geek' CEO sought both control and escape  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage