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Journalism of Courage
The rupee rose to a one-month high on Wednesday helped by dollar inflows from a large corporate, but pared gains as the local equity market turned negative after a strong opening.
At 11:05 a.m., the partially convertible rupee was at 47.19/20 per dollar, 1 per centstronger than 47.69/70 at close on Tuesday.
The rupee rose as far as 46.70 in early deals, its strongest since Oct. 3, as it extended its recovery from a record low of 50.29 on Oct. 27.
8220;Equities opened higher, and after the Obama win, the general world seems to be happy,8221; said a senior dealer with a primary dealership.
Democrat Barack Obama captured the White House on Tuesday, defeating Republican John McCain to make history as the first black US President.
8220;There is also some huge corporate inflows seen yesterday as well, which are continuing,8221; the senior dealer added.
Four other dealers also said the continuing dollar inflows from a large pharmaceutical company which began on Tuesday had helped the rupee surge above 47 per dollar.
India8217;s main stock index opened up 2.8 per centon Wednesday, but the reversed direction to be down more than 2 per centas investors locked in gains after the market had risen more than 40 per centfrom a three-year low hit last week.
Dealers said there was no real dollar demand in the market and the volumes were slightly lower than average. Banks that had taken long dollar positions based on the high prices in the non-deliverable forwards were unwinding them, they added.
One-month offshore non-deliverable forward contracts were quoting at 47.45/65 per dollar, slightly weaker than the onshore spot rate but much below 51-52 levels seen last week.
