* Rupee ends at 54.55/56 per dlr vs 54.85/86 on Tues
* All-round dlr demand from oil, gold and defence firms seen
* Dlr sales by Power Fin Corp, exporters help rupee
By Swati Bhat
MUMBAI, Dec 19 The Indian rupee snapped a
five-day losing streak on Wednesday as dollar sales by a power
sector financing firm helped offset demand from oil and gold
importers while positive domestic shares also aided.
Traders said gold importers were spotted buying the
greenback to pay for their purchases, especially since the
yellow metal remained within sight of almost four-month lows in
the global market.
Gold prices in India extended losses to their lowest in
nearly two weeks on the back of a stronger rupee, which prompted
some bargain buying by importers in the wedding season.
"Defence demand has been on the higher side these days along
with the normal oil demand. But there were some inflows heard
from a power sector financer," said A. Ajith Kumar, a foreign
exchange dealer with Federal Bank.
"Think the rupee may now consolidate between 54 and 55
levels for some time," he added.
Other traders also attributed the dollar inflows of around
$300 million to Power Finance Corp. PFC was likely to raise $500
million via mid-term notes this week at the earliest, chairman
Satnam Singh had said last week.
The partially convertible rupee closed at 54.55/56
per dollar versus its previous close of 54.85/86. The unit moved
in a range of 54.4850 to 54.93 during the session.
Traders said gains in the euro and other Asian peers also
supported sentiment for the rupee.
The euro hit a 16-month high against the yen and 7-1/2 month
peak against the dollar on Wednesday, helped by
better-than-expected German business confidence data.
Local shares rose for a second consecutive session,
marking their highest close in almost two weeks, led by IT
stocks such as Infosys after recent losses were seen as overdone
with hopes of a resolution to the "U.S. cliff" standoff also
likely to improve the outlook for the sector.
"The sentiment was broadly positive rupee today but there
was the usual oil and defence demand in early trade. Gold demand
was also strong today. Rupee is unlikely to strengthen much from
here though, as month and year-end demand will again push it
lower," the treasurer at a large state-run bank said.
In the offshore non-deliverable forwards market, the
one-month contract was at 54.91 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 at around 54.72
with a total traded volume of around $4.65 billion.
(Editing by Sunil Nair)