Rupee gains 7 paise to reach month high of 59.04

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SummaryAfter another day of volatile trade, the rupee on Friday appreciated by seven paise to close at a new one-month high of 59.04

After another day of volatile trade, the rupee on Friday appreciated by seven paise to close at a new one-month high of 59.04 against the dollar as the Reserve Bank of India’s (RBI) liquidity-tightening measures continued to lend support.

The benchmark Sensex at the BSE, however, fell for the third day and closed 56.57 points lower at 19,748.19, dragged down by metal, realty and bank stocks ahead of the RBI’s policy review next week.

At the interbank foreign exchange market, the rupee opened strong at 58.82 a dollar from the previous close of 59.11 and strengthened to 58.69 on initial gains in local stocks. Later, it fell to a low of 59.10 before closing at 59.04, a rise of 0.12 per cent — its third day of gains.

“The currency continued to get a boost from the number of measures taken by the RBI in last 10 days,” said Abhishek Goenka, founder & CEO of India Forex Advisors. “It indicates that the central bank is not ready to see the rupee weakening and will take every possible step to stem the fall,” he said.

Meanwhile, weak first-quarter results from Hindustan Unilever (HUL) and Sterlite Industries affected domestic market sentiment. Brokers said investors refrained from creating major positions before the RBI’s credit policy review.

Foreign institutional investors pulled out a net Rs 442.94 crore on Thursday, according to provisional BSE data. The 50-share Nifty index on the National Stock Exchange fell 21.30 points, or 0.36 per cent, to 5,886.20. The SX40 index on the MCX-SX, fell 0.32 per cent. Foreign institutional investors pulled out a net Rs 442.94 crore yesterday, according to provisional BSE data.

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