Rupee rises ahead of Lok Sabha vote on FDI in retail

MUMBAI Wed Dec 5, 2012 5:15pm 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

MUMBAI (Reuters) - The rupee rose for a fifth session in six on Wednesday as investors remained hopeful for a parliamentary approval to foreign direct investment in the multi-brand retail sector which will be put to vote in the lower house later in the day.

The government bowed to intense opposition pressure last week and agreed to a vote on its decision to let foreign supermarkets set up shop in India, taking a major step towards ending a deadlock that had paralysed the parliament for days.

Post the voting in the lower house, the reform will then be put to vote in the upper house on Thursday.

"Rupee gains were mostly sentiment driven today with the euro being stronger and on expectations of the parliament approving FDI in retail. Lesser oil demand also helped," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank.

"If FDI gets approved, 54.00 (level) should be broken," he added.

The euro hit a seven-week high against the dollar on Wednesday as efforts to tackle the debt crisis in Greece and subsiding concerns about Spain improved investor appetite for euro zone assets.

The partially convertible rupee closed at 54.54/55 per dollar versus its previous close of 54.68/69.

The BSE Sensex gained for the sixth time in seven sessions on hopes the government will muster a majority in the parliament on the crucial vote.

"I feel parliamentary approval is discounted to an extent. Today's vote may go through but upper house remains a challenge as per experts," said Paresh Nayar, head of fixed income and forex trading at First Rand Bank.

"The first support is at 54, but continuous improvement in sentiment and FII inflows may take INR towards 53 in few weeks. If the vote goes against the government, stocks will react negatively thereby impacting the rupee and once again, a move towards 56 may start," Nayar added.

In the offshore non-deliverable forwards market, the one-month was at 54.81 while the three-month was at 55.34.

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 54.7875 with a total traded volume of $4.29 billion.

(Editing by Anand Basu)

FILED UNDER:

"India's Daughter"

Reuters Showcase

Microfinance

Microfinance

Funding the unfunded: India helps small business borrow to grow  Full Article 

Insurance Sector

Insurance Sector

UK healthcare firm Bupa sees strong growth in India  Full Article 

Sensex Rises

Sensex Rises

Sensex edges up; consumer and healthcare stocks rise  Full Article 

Market Eye

Market Eye

FTSE adds nine Indian firms as large-caps in Asia-Pacific ex-Japan index   Full Article 

Indian Ocean Diplomacy

Indian Ocean Diplomacy

PM Modi to ramp up help for Indian Ocean nations to counter China influence  Full Article 

ECB Bond-Buying

ECB Bond-Buying

ECB raises growth forecasts, to start printing money next week  Full Article 

China Economy

China Economy

China signals "new normal" with lower annual growth target  Full Article 

Pharma Sector

Pharma Sector

Panel recommends waiving late-stage trials for some drugs  Full Article 

E-commerce

E-commerce

China backs e-commerce expansion in win for Alibaba, JD.com  Full Article 

Reuters India Mobile

Reuters India Mobile

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