A decent start to the domestic share market supported gains in the Indian rupee on Wednesday, December 22, 2010. The domestic currency edged up in line with the regional peers following slight decline in the US dollar overseas. Rupee inched up at commencement by mere 1 paisa at Rs 45.22 per dollar but was driven higher to hit an intra day high at 45.10 so far during the day. The local unit registered the day's low at 45.26 and was last seen trading at around 45.15, higher by around 9 paise or 0.19% as compared to 45.23 as registered in previous close.
Rupee was propelled by sustaining rise in local equities that managed to regain their crucial levels in yesterday's trade. The domestic benchmark indices struck two-week highs in early trade, tracking mostly higher Asian stocks. Most Asian shares rose on Wednesday, 22 December 2010 after a $6.3 billion banking deal sent Wall Street to new two-year high overnight. Trading in US index futures indicated that the Dow could shed points at the opening bell on Wednesday, 22 December 2010.
Meanwhile, foreign funds sold Indian shares worth Rs 34.79 crore while domestic funds bought shares worth Rs 373.67 crore as per provisional figures on Tuesday. The barometer index BSE Sensex crossed the psychological 20,000 mark. The key benchmark BSE Sensex is currently up around 33 points at 20093.24 while S&P CNX Nifty at the time of writing is a tad higher than the psychological 6000 mark.
The European unit was edging higher today after having fallen sharply versus the US dollar late yesterday and having extended some of its losses in early Asian trades on Wednesday. The euro turned lower again after investor confidence took another blow on concerns of possibility of more credit downgrades in Europe. The common currency dropped below 1.3080 levels late yesterday and was currently quoting at around 1.3132 versus the greenback.
The US dollar index, which tracks the greenback against a trade-weighted basket of six major currencies, is lower by 0.19% at 80.57. Among Asian currencies, the South Korean won down just 0.06% at 1155.90, the Taiwan dollar by 0.25% at 29.95 while the Indonesian Rupiah flat at 9042.50 against the US dollar, slowly making a move into the positive.
In the domestic bond market, early today, the yield on 10 year benchmark 7.80 GS 2020 federal paper on Tuesday was at 7.94% lower by 1 bp as compared to 7.93% as on Tuesday. Yield on the federal paper 7.99 GS 2017 was at 7.91%, down 1bp as against 7.90% registered in previous closing. Meanwhile, the yield on another widely traded federal paper 8.13 GS 2022 was at around 8.04%, lower by 2 bps as compared to yesterday's close at 8.02%.
In the domestic currency futures market on the NSE, the front month December USD/INR contract opened on Wednesday at 45.26 per dollar mark. The contract hit an intra day high at 45.32 and registered a low at around 45.17 so far during the day. Meanwhile, euro- rupee contract was at around 59.39, down by 0.37%, as against 59.61 registered in previous close. The JPY/INR contract was lower by 0.30% at 54.00 against 54.16 in the previous session. GBP/INR contract was at 70.00 weaker by 0.30% as against 70.21 as registered at close on Tuesday.
At the time of writing, the NSE December USD/INR contract was at 45.20, lower by 10 paise or 0.22% compared to the previous close at 45.30. The rupee contract on the MCX was trading close to the NSE contract and was last seen at 45.20 as against 45.30 as on Tuesday. Rupee on the contracts will likely find support at 45.12 for the day.
