MY: Rupee retreats from near 2-week high on shares
The rupee further retreated on Thursday, after touching near two-week peaks in the previous session, as early losses in domestic shares and weak regional peers dampened sentiment.
At 9:52 am (0422 GMT), the partially convertible rupee was at 46.10/11 per dollar, 0.3 % weaker than its 45.97/98 previous close. On Wednesday, it rose as high as 45.94, its strongest since Jan. 21.
"The dollar's strengthening overnight has weighed on the rupee. For the time being, 46 should hold but upside should also be rangebound upto 46.40," said V.Kumar, head of foreign exchange trading at State Bank of Travancore.
The US dollar was on a firm footing on Thursday, while the New Zealand dollar dived after a sharp jump in unemployment, dragging other growth-linked currencies along with it.
Most Asian units were weaker compared to the dollar.
The BSE Sensex was trading down 0.8%, after rising the most in six weeks in the previous session, as weakness in global markets weighed.
Foreign fund investments into local shares are a key driver for the market and the rupee. Foreigners have been net sellers of USD 1.9 billion worth of stocks in 12 of the last 15 trading sessions.
"The rupee is weak, but has not fallen as much as other regional currencies. So there seems to be some share-sale inflows, must be at least about USD 1 billion," a senior dealer with a private bank said.
A USD 1.8-billion share sale in NTPC Ltd, India's leading power producer, was three-quarters subscribed on its first day, with solid institutional interest offset by an anaemic response from retail investors on Wednesday.
One-month offshore non-deliverable forward contracts were quoted at 46.04/14, little changed from the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both quoting at 46.1350, with the total traded volume on the two exchanges at about USD 650 million.
