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Indian rupee may gain on Asian stock cues

Rupee may nudge higher on Monday, supported by firmer Asian stock markets that could halt equity outflows and revive foreign buying of local stocks.

business Updated: Jun 16, 2008 08:51 IST

The Indian rupee may nudge higher on Monday, supported by firmer Asian stock markets that could halt equity outflows and revive foreign buying of local stocks, but high inflation will keep a lid on sharp gains.

* The partially convertible rupee ended at 42.94/95 per dollar on Friday, 0.24 per cent weaker than its Thursday's close of 42.835/845 and down more than 8 percent in 2008. It had hit a 13-month low of 43.21 in late May.

* Foreigners have so far sold a net $5.6 billion rupees of stocks this year, a sharp turnaround from record buying of $17.4 billion in 2007, when the rupee rose more than 12 percent. The stock market fell 0.4 percent on Friday, and is down more than a quarter in 2008.

* Asian stocks rose slightly on Monday as the rebounding US dollar boosted confidence in the region's exporters, but government bonds fell on expectations that central banks will raise rates to fight inflation.