The Indian rupee opened slightly higher on Thursday, 09 December, alongside regional peers, tracking losses in the US dollar early today that registered strong gains in the previous session. The domestic currency commenced up by around 7 paise at Rs. 45.01 per dollar and hit an intra day high at 44.99. However, the local equities slipped into the negative region after registering a firm start to the day, pushing the domestic unit lower to touch an intra day low at 45.09 so far during the day. In the spot currency market, rupee was last seen traded at the day's low of 45.09, almost unchanged as compared to previous close at 45.08.
The domestic chare market dropped within the first few minutes of trade, restricting any strong gains in rupee on account of a waning US dollar overseas. Data showing heavy selling by foreign funds on Wednesday, 8 December 2010, dampened sentiment. Foreign funds dumped shares worth a net Rs. 1484.90 crore on Wednesday, 8 December 2010, as per the provisional data from the stock exchanges. Domestic funds bought shares worth a net Rs. 409.05 crore on that day.
Meanwhile, most of the Asian markets were in positive territory on Thursday, 9 December, after an agreement in the US to extend tax breaks sent US shares moderately higher. Trading in US index futures indicated that the Dow could gain 37 points at the opening bell on Thursday, 9 December 2010. The domestic benchmark indices also reversed its losses and were seen edging up into the positive terrain. The benchmark Sensex is currently up around 10 points at 19706.69 while S&P CNX Nifty at the time of writing is up 1.60 points at 5905.0.
The greenback that was rallying late yesterday reversed its course in early Asian trades on Thursday, snapping a three day gain against the euro as US Treasury bond yields slipped after rising for the past few days. The 2-year U.S. note yield hit a 4-1/2 month high of 0.64%, though the 10-year yield stepped back a little to 3.27% from 3.33%, the highest since early June, in New York overnight. The US dollar rose to as much as 1.3179 levels on Wednesday and turned around to be currently quoting at around 1.3307 versus the European common currency.
The US dollar index, which tracks the greenback against a trade-weighted basket of six major currencies, is down 0.31% at 79.75. A weak dollar aided gains in the other Asian currencies. Taiwan dollar is up around 0.24% at 30.11, the Indonesian Rupiah by 0.10% at 9014.50 while the South Korean won higher by 0.70% at 1138.10 against the US dollar.
In the domestic bond market, early today, the yield on 10 year benchmark 7.80 GS 2020 federal paper was at 8.11% flat as compared to Wednesdays close. Yield on the second most traded federal paper 7.99 GS 2017 was at 8.03%, lower by 1 bps against previous closing at 8.04%. Meanwhile, the yield on federal paper 8.13 GS 2022 was at around 8.18%, down 2 bps as compared to 8.20% registered in previous close.
In the domestic currency futures market on the NSE, the front month December USD/INR contract opened on Thursday at 45.24 per dollar mark. The contract hit an intra day high at 45.27 and registered a low at around 45.15 so far during the day. Meanwhile, euro- rupee contract was at around 60.22, up by 0.53%, as against 59.90 registered in previous close. The JPY/INR contract was higher by 0.11% at 54.07 against 54.01 in the previous session. GBP/INR contract was at 71.57, up 0.28% as against 71.37 as registered at close on Wednesday.
At the time of writing, the NSE December USD/INR contract was at 45.24, down by 2 paise or 0.03% compared to the previous close at 45.25. The rupee contract on the MCX was trading close to the NSE contract and was last seen at 45.25 almost flat as against the previous closing price. Rupee on the contracts will likely find resistance at 45.32 for the day.
