MUMBAI (Commodity Online): Reduced losses in the European currency against a weakening US dollar aided small gains in the Indian unit at opening on Thursday, July 07, 2011.
Rupee commenced trading at Rs. 44.43 per dollar and hit an intraday high of 44.37 tracking a rebound in the domestic equities that registered a decent start to the day.
A further advance in the local shares as well as marginal gains in euro on anticipating a rate hike by ECB is expected to provide positive cues to the Indian unit today. Rupee, in the spot currency market was last seen trading at 44.43 at 11.00 AM IST, higher by around 6 paise or 0.14% as compared to previous close at 44.49.
The domestic key benchmark indices saw a firm start buoyed by positive global cues. Sustained buying by foreign institutional investors (FIIs) over the past few days also boosted sentiment. Meanwhile, Asian indices edged higher on Thursday following a rise on Wall Street as investors looked beyond the latest bout of nervousness over the euro zone debt crisis after Moody's slash in the ratings of Portugal sparked a sell-off in peripheral bonds.
FIIs bought Indian shares worth a net Rs 220.45 crore on Wednesday, as per provisional data from the stock exchanges. Domestic institutional investors (DIIs) sold shares worth Rs 80.23 crore on that day. At the time of writing, India's key benchmark BSE Sensex was up 95.68 points at 18822.65 while S&P CNX Nifty was also up 26.80 points at 5652.25.
The European unit gave up yesterday's sharp declines against the US dollar, although up only marginally in early Asia today. The euro edged higher on Thursday following overnight falls, ahead of the European Central Bank's policy meeting at which a rate hike is expected. After having strengthened to almost 1.4285 versus the single common currency late on Wednesday, the greenback weakened slightly to be currently trading at 1.4321 aiding rupee alongside regional peers.
Meanwhile, the US dollar index which measures the performance of the U.S. unit against a basket of six currencies is also lower by 0.19% to 74.98. Among Asian currencies, the Taiwan dollar edged up 0.001% at 28.81, the Indonesian Rupiah 0.06 at 8538.75 while the South Korean won dipped lower 0.07% at 1064.20 as against the US dollar.
In the domestic currency futures market on the NSE, the front month July contract opened on Thursday at 44.47, higher than spot market rupee. The contract hit an intra day high at 44.61 and registered a low at around 44.44 so far during the day. Meanwhile, euro- rupee contract was lower by 0.22% and was at 63.83 from 63.97 in the previous session. The JPY/INR contract edged down 0.08% at 55.08 from 55.13 and the GBP/INR contract fell 0.30% at 71.27 from 71.49 at close on Wednesday.
At the time of writing, the NSE as well as MCX July 2011 USD/INR contract was trading at around 44.57 down by around 9 paise or 0.19% compared to previous close at 44.65. Rupee on the contract will likely find an intraday support at 44.51.
