* 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
By Subhadip Sircar
MUMBAI, May 7 The Indian rupee rose on Tuesday,
snapping three sessions of losses, as rumoured inflows related
to a corporate deal helped offset dollar demand for
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
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
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
"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
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)