* Rupee ends at 60.83/84 per dollar vs 60.92/93 on Wednesday
* Fed stance seen leading to greater flows to emerging mkts
* Rumours that rating agencies may upgrade India rating
By Gaurav Pai
MUMBAI, Sept 18 The Indian rupee gained on
Thursday tracking a rally in domestic shares on hopes the
country would retain its appeal to foreign investors, despite
uncertainty about the outlook for U.S. interest rates that hit
other emerging markets.
The U.S. Federal Reserve on Wednesday renewed its pledge to
keep interest rates near zero for a "considerable time," but
also indicated it could raise borrowing costs faster than
expected when it starts moving.
Although emerging Asian currencies were hit, the rupee
gained as Indian shares rose nearly 2 percent on speculation of
strong foreign buying due to improving domestic fundamentals.
"The turnaround in the stock market during the course of the
day on back of various rumours changed the outlook for the
pair," said Naveen Raghuvanshi, a foreign exchange dealer with
DCB Bank in Mumbai.
The partially convertible rupee ended at 60.83/84
per dollar, compared to its close of 60.92/93 on Wednesday.
The rupee's modest gain stood out against the 0.27 to 0.81
percent fall in the Indonesian rupiah, Korean won, Malaysian
ringgit and the Philippine peso.
Foreign funds have bought debt and equity worth nearly $3.10
billion so far in September, as per regulatory data, bringing
their total for the year to $33.15 billion.
Some traders said a report from news channel Zee Business
that Standard & Poor's would raise its rating on India also
boosted shares and bonds, even as analysts said a full grade
upgrade is unlikely given that India is at a "negative" outlook.
In the offshore non-deliverable forwards, the
one-month contract was at 61.17/22 while the three-month
contract was at 61.76/86.
FACTORS TO WATCH
* Euro rose against $ after ECB loans to banks move
* $ higher on diverging outlook for global rates
* Dollar hits six-year peak versus yen
* Foreign institutional investor flows
* For data on currency futures
DIARIES & DATA:
Indian Data Watch European diary
Indian diary US Diary
(Editing by Sunil Nair)