Indian rupee gains as stocks rise
The Indian rupee rose to three-week highs on Monday as investors speculated capital inflows would rise following a rebound in Asian stock markets, but dollar buying by oil refiners is seen checking sharp gains.business Updated: Feb 09, 2009 10:33 IST
The Indian rupee rose to three-week highs on Monday as investors speculated capital inflows would rise following a rebound in Asian stock markets, but dollar buying by oil refiners is seen checking sharp gains.
At 10:05 am (0435 GMT), the partially convertible rupee was at 48.58/59 per dollar, a level it last tested on Jan 19 and a fifth of a per cent above Friday's close of 48.67/68.
"The stock market is expected be firm and that will support the rupee but in the absence of any meaningful flows, the action will be two-way," said a senior dealer at a foreign bank.
The main BSE stock index was up 0.8 per cent in early trade in anticipation of stimulus packages, both in India and in the United States. Stocks in Asian were also higher, while the dollar clung near a one-month high against the yen.
Oil paused from its decline and steadied around $40 a barrel as hopes the United States would act swiftly to approve an economic stimulus this week outweighed demand concerns.
Sentiment was also supported by data that showed India's foreign exchange reserves rose $1 billion in the week ended on Jan 30. Reserves had fallen $4.6 billion in the week before.
Traders are waiting for the first official estimate for economic growth in the 2008/09 fiscal year, which will provide insights into the extent to which the global crisis affected economic expansion in Asia's third-biggest economy.
While the central bank estimates growth at around 7 per cent, a six-year low, many private analysts expect growth below that number. The data is due around 11 am (0530 GMT).