The Indian rupee commenced flat and remained weak so far on Thursday, August 04, 2011 as broad gains in the US dollar limited any gains in the domestic currency owing to slightly improving local shares. Rupee opened almost unchanged at Rs. 44.32 per dollar and dropped to a low of 44.45 so far during the day. In the spot currency market, the Indian unit was last seen trading at 44.42, lower by 11 paise or 0.24% as compared to previous close at 44.32.
The intervention to sell the yen and buy the dollar drove the greenback to more than 79 yen Thursday from 76.99 late Wednesday. Tokyo stepped in as the yen edged towards its record post-war high against the US dollar which could have a severe impact on the ailing Japanese economy. Japan intervened in the currency markets for the first time in more than 4-months, in order to curb further strength in the Japanese currency. The greenback is seen rising against other major currencies as well. As against the euro, dollar climbed to almost 1.4278, having registered a low of 1.4371 early today.
Meanwhile, the US dollar index which measures the performance of the U.S. unit against a basket of six currencies is up 0.50% at 74.41. Among Asian currencies, the Taiwan dollar is almost flat at 28.90, the Indonesian Rupiah unchanged at 8488.75 while the South Korean edged up 0.07% at 1059.62 as against the US dollar.
Bargain hunting after a recent steep slide helped the market drifts slightly higher in early trade. The barometer index BSE Sensex intermittently hit the psychological 18,000 mark. Asian shares were mixed on Thursday, while Japanese stocks rose with exporters getting a lift as Japan intervened in the foreign-exchange market to stem the yen's recent rise.
FIIs sold Indian shares worth a net Rs. 869.69 crore on Wednesday, as per provisional data from the stock exchanges. Domestic institutional investors (DIIs) bought shares worth Rs. 422.48 crore on that day. At the time of writing, India's key benchmark BSE Sensex is up 84.20 points at 18024.75 while S&P CNX Nifty is higher by 25.95 points at 5427.75.
In the domestic currency futures market on the NSE, the front month 26 August-2011 contract opened on Thursday at 44.50, higher than spot market rupee. The contract hit an intra day high at 44.60 and registered a low at around 44.46 so far during the day. Meanwhile, euro- rupee contract edged lower 0.01% at 63.57 from 63.58 in the previous session. The JPY/INR contract is down sharply by 2.39% to 56.29 from 57.67 while the GBP/INR contract added 0.07% at 72.91 from 72.86 at close on Wednesday. At the time of writing, the NSE as well as MCX August 2011 USD/INR contract was trading at around 44.57, up around 8 paise or 0.17% as compared to previous close at 44.49.
