India rupee at 3-1/2 months closing high; more gains seen

Tue Feb 5, 2013 5:52pm IST

Related Topics

Stocks

   

* Rupee ends at 53.135/145 vs Monday's close of 53.285/295

* Rupee seen in 52.80-53.50/dlr range this week

* Global uncertainty, local dollar demand could weigh

By Shamik Paul

MUMBAI, Feb 5 (Reuters) - The Indian rupee strengthened to its highest closing level in three-and-a-half months on Tuesday, helped by foreign inflows ahead of the government stake sale in state-run power producer NPTC, although weak domestic shares and demand for the greenback from oil importers limited gains.

The government is looking to raise about $2 billion through a stake sale this week in NTPC Ltd as part of efforts to raise funds towards meeting its fiscal deficit target. Dealers expect foreign fund inflows between $300 million and $500 million for the transaction.

Other stake sales before the fiscal year ends in March include state trading company MMTC Ltd and steelmaker Steel Authority of India Ltd.

Still, gains in the rupee in the near term could be constrained by caution ahead of the federal budget for 2013/14 this month. India needs to commit to its recent reform measures and meet its fiscal deficit targets, Fitch Ratings said on Monday.

"Foreign funds are bringing in dollars for investing in NTPC. We are seeing inflows on account of front running of the NTPC offer," said Anil Kumar Bhansali, vice-president at Mecklai Financials.

The partially convertible rupee closed at 53.135/145 per dollar, its strongest closing level since Oct. 17, and versus its previous close of 53.285/295, after moving in a 53.07 to 53.42 range during the day.

The rupee's gains were constrained after domestic shares fell for a fifth session out of the past six, while dealers also cited dollar demand from oil importers.

In the coming days, adverse global sentiment and dollar demand in the domestic market could also weigh, said traders, keeping the rupee in a 52.80 to 53.50 per dollar range this week.

"The inflows would aid, but the rupee would also depend on the global sentiment," a senior trader with a foreign bank said.

In the offshore non-deliverable forwards, the one-month contract was at 53.49, while the three-month was at 54.06.

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 about 53.35 with a total traded volume of $5.25 billion. (Editing by Anand Basu)

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

Market Eye

Sensex, Nifty rise to second consecutive record high

Sensex, Nifty rise to second consecutive record high

The BSE Sensex and Nifty on Friday rose to their second consecutive record highs. The 30-share Sensex surged as much as 1.52 percent to an all-time high of 27,762.13. The broader Nifty gained as much as 1.49 percent to a record of 8,291.65.  Full Article 

REUTERS SHOWCASE

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

Reuters India Mobile

Reuters India Mobile

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