Rupee edges up as shares climb

The rupee nudged higher on Monday as firmer shares raised hopes for foreign portfolio inflows and sentiment was underpinned by the euro’s gains.

Demand for dollars from oil importers kept the rupee’s rise in check and traders said the market would be rangebound because of holidays in Japan and the United States.

At 10:45 a.m. (0515 GMT), the partially convertible rupee was at 49.1050/1100 per dollar, 0.1 percent stronger than Friday’s close of 49.1550/1650.

“Corporate demand for dollar is weighing on the rupee, but the bias is towards appreciation. The euro is strengthening, and the Sensex is up for the second straight day,” a trader with a state-run bank said.

Indo Thai Securities Ltd IPO Oversubscribed!

THANKS FOR THE SUPPORT

IPO of Indo Thai Securities was subscribed 1.18 times on final day. It received total of 4.70 million against issue size of 4 million, of which 4.39 million were obtained at a cut-off price.

Indo Thai entered the capital market with a fresh issue of 4 million equity shares of Rs.10 each, in the price band of Rs. 70 to Rs. 80 a share, aiming to raise Rs. 280-340 million. The issue, comprising about 40% of the company`s post issue paid-up capital.

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Indian rupee to rise after 6-day slide

The Indian rupee is expected to snap a six-day slide on Tuesday and pull back from 14-month lows, taking comfort from higher euro and regional currencies.

* Traders expect the rupee to open around 47.15/20 per dollar and move in a 46.90-47.30 band. It had closed down 1.5 percent on Monday at 47.22/23, after hitting 47.23 — its weakest since July 22, 2010.

* Monday’s relaxation of rules for foreign institutional investments in long-term infrastructure corporate bonds could also support rupee sentiment.

* The euro held above a seven-month low against the dollar in Asia on Tuesday after a whippy session overnight saw a wave of short-covering lift it more than two cents on hopes that China will bolster Italy by buying its bonds.

* At 0303 GMT, the euro was at $1.3675, jumping from a low of around $1.3495, after the Financial Times reported that Italy had asked China to make “significant” purchases of Italian debt. It was at $1.3623 when the rupee closed on Monday.

* The MSCI index of Asian stocks ex-Japan was down 0.1 percent, while the Nifty India stock futures SINc1 were 0.55 percent higher in Singapore, indicating higher start for local stocks.

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Rupee appreciates by 29 paise Vs dlr to end at one-week high

Dollar index was down by 0.08 per cent against its major rivals while New York crude oil was trading above USD 88 a barrel in European market today. Meanwhile, food inflation rose to double digit, after a gap of five months, to 10.05 per cent for week ended August 20 from 9.80 per cent in the previous week.

The rupee closed stronger today with the rally in local stocks. With the US Non Farm Employment change (NFP) data expected robustly, week traders are undertaking profit booking thus weakening the greenback.

The local unit has a weaker bias and we can comfortably target 46.10-46.15 levels in the week to come. The rupee premium for the forward dollar recovered on fresh paying pressure from banks and exporters.

The benchmark six-month forward dollar premium payable in February concluded up at 70-73 paise from Tuesday’s close of 62-1/2-65-1/2 paise and far-forward contracts maturing in August also finished higher at 132-1/2-135-1/2 paise from 124-127 paise previously.

The RBI fixed the reference rate for the dollar at Rs 45.8965 and the euro at Rs 65.4075.The rupee improved further against the pound sterling to end at Rs 74.22/24 from Tuesday’s close of Rs 75.05/07 and also bounced back to Rs 65.27/29 per euro from Rs 66.35/37 previously. It too rebounded against the Japanese yen to Rs 59.63/65 per 100 yen from last close of Rs 59.96/98.

India’s growth to slow down to 7% this fiscal

India’s economic growth could slow down to 7 per cent in the current fiscal as investment activity is likely to be reduced in the present high interest rate regime, consultancy firm Deloitte said.

“Costlier credit could also lead to a drop in investment activity through the year. Consequently, GDP growth for the current fiscal could be as low as 7 per cent,” Deloitte said in its Global Economic Outlook report.

The Indian economy grew by 8.5 per cent last fiscal. In the current fiscal, the government expects the economy to expand by 8.5 per cent, while RBI said growth could moderate to 8 per cent.

Deloitte said high inflation situation is likely to persist in India and the Reserve Bank would continue with tight monetary policy stance. Also, if the fiscal situation does not improve, the economic challenges will not be alleviated in the coming year.

“Inflation is unlikely to subside in the near term and the central bank will probably continue raising interest rates until inflation stabilises around 6 per cent,” it said, adding, the rise in the price of diesel, kerosene and cooking gas is likely to stoke inflation.

Overall inflation breached the 9 per cent mark in December, 2010 and in July, 2011 it was at 9.22 per cent.

RBI has already hike key interest rates 11 times since March, 2010 to control inflation. Experts feel increased cost of borrowing could lower investments.

In the April-June quarter (Q1) of the current fiscal, the Indian economy expanded by 7.7 per cent, lower than 8.8 per cent in the corresponding period of the last fiscal.