Rupee opened higher on Monday by around 11 paise at Rs. 46.78 per dollar tracking a firm start by the domestic equities, regaining its psychological 18000 mark after having lost the level on Friday. Meanwhile, marginal gains in the euro against the US dollar since early today also supported the domestic currency. However, a slight retreat of the BSE index from its day's high dragged the Indian currency also slightly lower from the day's commencement. Rupee was trading in a very narrow range of 46.78-84 so far during the day.
The market surged in early trade, tracking gains in Asian stocks. US stocks rebounded to post their best gains in nearly four weeks on Friday, 27 August 2010, after comments from Federal Reserve Chairman Ben Bernanke. The stock market started on a positive note after US economic growth was revised down in the second quarter, but still the reading was better than expected. Meanwhile, Bernanke told central bankers at a conference in Jackson Hole, Wyoming the recovery has weakened more than expected but the US central bank was ready to take further steps if needed to spur the recovery. However, the domestic market came off the day's high in morning trade. The key BSE Sensex was now up 91 points or 0.51%, off close to 130 points from the day's high.
Meanwhile, the US dollar gained against most of the major currencies but remained steady against the European unit after the Fed comments. However, the euro recovered early today and was at 1.2740 as compared to 1.2730 on Friday. Also, the Japanese yen that was declining on Friday was pushed higher against the dollar and euro after the central bank announced to loosen monetary policy by expanding on its current program of three-month loans. Yen was at 85.25 against the greenback. Meanwhile, the Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was down 0.06% at 82.87.
Spot rupee commenced on Monday at 46.78. The partially convertible currency registered an intra day low at 46.84 and hit an intra day high at 46.78 so far during the day, as per data from CCIL. Rupee was last seen trading at 46.83 by 12.00 IST, up around 6 paise or 0.13% as compared to the previous closing price at 46.89.
In the domestic currency futures market on the NSE, the front month September contract opened on Monday at 47 per dollar mark and was trading weaker than the spot rupee. The contract hit an intra day high at 47.04 and registered a low at around 46.94 so far during the day. Rupee was last seen trading at 47.03, up 7 paise or 0.15% as compared to the previous close at 47.10. The rupee will likely find an intra day support at 46.96.
In the domestic bond market, the yield on 10-year benchmark federal paper, 7.80% GS 2020, remained almost flat at 7.97% during the trade at around 11.15 AM IST. Meanwhile, the yield on second most traded paper, 8.13% GS 2022, also inched up by 1 bps to 8.00% as compared to 7.99% at close in the previous trading session. The Indian federal yields inched up during the morning trade-tracking rise in U.S treasury yields. The U.S. treasury yields closed high on Friday after the Federal Reserve Chairmen signaled no new bond buying by the Central bank.
Meanwhile, in commodities, light sweet crude oil for October delivery was down 5 cents to US$ 75.12 on the GLOBEX division of New York mercantile exchange.
