(RTTNews) - The Indian rupee held steady against its US counterpart on Thursday, recovering from early Asian session's losses as the latter weakened against the euro and equities rallied on hopes that euro zone members will take concrete actions to solve the debt crisis.
Optimism over the German Parliament vote on the expansion of a bailout fund and short covering on account of the expiry of near-month derivative contracts lifted Indian equities sharply higher today. Investors shrugged off data showing a spike in food inflation in mid-September.
After a fall in the preceding three weeks, India's annual food inflation rate rose to 9.13 percent for the week ended September 17, government data released today showed. The rise in food inflation toward the double-digit mark is an area of "grave concern", Mukherjee told reports in New Delhi.
Separately, official data released today showed growth in India's infrastructure sector output slumped to an 11-month low of 3.5 percent in August, sharply slower than a revised annual growth of 7.5 percent in the previous month, due to significant fall in coal and natural gas output.
Erasing initial losses, the benchmark 30-share Sensex closed up 252 points or 1.53 percent at 16,698, with 23 of its components gaining ground. The broader Nifty index on the NSE closed at 5,015, up 70 points or 1.41 percent from its previous close.
The rupee that fell below the 49.10 mark against the US dollar in the early part of the session bounced back to 48.85 in the afternoon deals. The domestic unit failed to cross that level and the pair was moving in a tight-range of 49.03 and 48.85 in the subsequent trading hours.
