India rupee snaps 3-day losing streak; corporate flows support
* Rupee ends at 54.135/145 per dlr vs 54.175/185 on Monday
* Dealers cite inflows related to Bharti Airtel stake sale
* Dollar demand for defence purchases by state-run banks-dealers
By Subhadip Sircar
MUMBAI, May 7 (Reuters) - The Indian rupee rose on Tuesday, snapping three sessions of losses, as rumoured inflows related to a corporate deal helped offset dollar demand for defence-related purchases.
Dealers cited heavy dollar selling by a clutch of foreign banks which they said was likely related to Qatar's purchase of a 5 percent stake in Indian telecoms company Bharti Airtel Ltd for $1.26 billion.
Those flows helped pull back the rupee from the day's low as the currency has been pressured in recent sessions by continued dollar purchases by state-run banks that dealers have pinned to demand from the defence sector.
Foreign fund inflows into stocks have also been strong, amounting to $680 million in the three sessions to May 3, regulatory data showed.
"The rupee is likely to be helped by inflows in the near term pertaining to stake sale and foreign fund inflows. It is expected to be in a 53.75-54.45 band in the near term, till some new factors prop up," said Ashis Barua, a senior forex dealer with IndusInd Bank.
The partially convertible rupee closed at 54.135/145 per dollar, stronger than its close of 54.175/185 on Monday, recovering from a session low of 54.36, the lowest since April 29.
The rupee may find support from more inflows, with DLF Ltd set to sell 81 million shares to institutional investors, a portion of which dealers expect will be sold abroad.
The spate of inflows may help the rupee overcome some of the negative sentiment after the central bank kept its outlook on inflation hawkish and said there was limited room for further rate cuts.
"Keeping in mind the flows present in the market and also the hawkish statement of RBI in its monetary policy, I expect the rupee to be range bound in the medium term," said Pramod Patil, assistant vice president, forex and money markets, at United Overseas Bank.
The recent global dollar strength has also weighed on the rupee, although the euro rose on Tuesday after better-than-expected German industrial data.
In the offshore non-deliverable forwards, the one-month contract was at 54.28 while the three-month was at 54.81.
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 around 54.23 with a total traded volume of $4.1 billion.
(Editing by Anupama Dwivedi)
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