* Rupee ends at 54.54/55 per dollar vs 54.68/69 on Tuesday
* Vote on FDI in multi-brand retail later in the evening
* Rupee likely to gain beyond 54/dollar if FDI in retail
By Swati Bhat
MUMBAI, Dec 5 The Indian 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
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.
Shares 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)