Mumbai: The rupee bounced back from a one-month low to post its first gain in the New Year, rising 10 paise to close at 62.16 against the dollar today after the RBI was said to have sold the US currency.
Strong foreign fund inflows into stocks and a recovery in local equities after initial losses also supported the rupee.
At the interbank foreign exchange market, the rupee opened lower at 62.38 a dollar from yesterday's close of 62.26, a one-month low.
It dropped further to 62.56 amid a fall in local stocks and dollar demand from importers.
The rupee bounced back to a high of 62.14 as local equities recovered and ended at 62.16, a rise of 10 paise or 0.16 per cent.
"During the last few hours, rupee started gaining, helped by RBI as it sold dollars in the market.
Overall in this week, rupee has depreciated by around 1.2 per cent," said Abhishek Goenka, CEO of India Forex Advisors.
In the previous two trading days, the rupee had dipped 46 paise. Over the past five days, the local currency has lost 31 paise, its first weekly drop in three.
The benchmark 30-share S&P BSE Sensex rebounded from early losses and closed 37 points lower.
Overseas investors bought shares worth a net Rs 674.05 crore yesterday, as per provisional data.
"Rupee fell to a one-month low as the dollar strengthened against emerging Asian currencies, taking cues from positive US economic data...RBI likely to have intervened and sold dollars via state run banks at 62.50 levels, which eventually helped the rupee to close on a strong note," said Pramit Brahmbhaat, CEO of Alpari Financial Services (India).
Next: Sensex falls 37 points, erasing early losses; IT in demand
Sensex falls 37 points, erasing early losses; IT in demand
Mumbai: The benchmark Sensex fell for the third straight day and dropped 37 points today even as value buying and gains in tech shares helped to trim early losses, wrapping up its worst weekly performance in two months.
Rising European stocks and sustained foreign fund inflows also helped in the recovery. Larsen & Toubro, Reliance Industries and Tata Motors fell as 19 Sensex shares declined.
Five of the 12 BSE sectoral indices dropped, led by power and capital goods shares even as tech stocks advanced.
The S&P BSE Sensex opened on a negative note and dropped 157 points to the day's low of 20,731.33 amid weak global cues. It closed at 20,851.33, a loss of 37 points or 0.18 per cent.
With a drop of 342 points this week, it was the worst performance for the Sensex since the period ended November 8. The broader, 50-share CNX Nifty on the National Stock Exchange softened by 10 points, or 0.16 per cent, to 6,211.15.
"Latter part of the day saw buying interest from lower levels and the Nifty managed to close above the 6,200 level. Political uncertainties in the country and profit booking at higher levels are limiting the upside for the index," said Rakesh Goyal, Senior Vice President at Bonanza Portfolio Ltd.
Heavyweights Infosys and TCS were the major gainers on the Sensex after the rupee's depreciation and an improvement in the US economy.
After touching a low of 62.55 against the dollar, the rupee traded at 62.30 at 16:00 hrs.
The markets appeared unimpressed after Prime Minister Manmohan Singh today said his government would continue to push economic reforms, create a favourable environment for foreign direct investment and work harder to generate more employment opportunities in the manufacturing sector.
Overseas investors bought a net Rs 674.05 crore of shares yesterday, according to provisional stock exchange data. Asian stocks, except Japan which was closed, finished lower after US equities retreated from record highs and a gauge of China's non-manufacturing industries declined.
Forward dollar premiums remained weak on sustained receipts by exporters.
The benchmark six-month forward dollar premium payable in June moved down to 247-249 paise from the overnight close of 248-1/2 to 250-1/2 paise and far-forward contracts maturing in December softened to 486-488 paise from 488-490 paise.
The RBI fixed the reference rate for the dollar at 62.4075 and for the euro at 85.1950.
The rupee recovered to 102.33 against the pound from 102.97 yesterday and turned positive to end at 84.79 per euro from 85.21. It dropped further to 59.51 per 100 Japanese yen from 59.07.
