RTRS:Indian rupee gains on inflows; economy still a dampener
* Rupee ends at 61.625/635 per dollar vs 61.74/75 on Friday
* Activity at Indian services firms shrank in October -
survey
* Dealers cite foreign telecom company inflows
By Subhadip Sircar
MUMBAI, Nov 5 (Reuters) - The Indian rupee recovered from
lows to snap two sessions of losses on Tuesday on bunched up
dollar sales related to foreign fund inflows, even as another
economic indicator pointed to continued uncertainty over a
revival.
Strong global liquidity has pushed Indian stocks to lifetime
highs even as economic indicators continue to remain grim. The
rupee has been a major beneficiary of the stock market inflows.
Foreign funds have bought $16.5 billion worth of shares so
far this year.
The buying has continued despite recent mixed economic data.
Indian services firms recovered slightly last month from the
worst slump in over four years in September, but activity still
shrank and a shortage of new orders means a rebound looks some
way off, a survey showed on Tuesday.
The data comes on the heels of factory output shrinking for
the third straight month.
"Despite the fall in stock markets, the rupee gained from a
low of 61.95 as custodial banks sold on behalf of FIIs," said
Anil Kumar Bhansali, vice president at Meclai Financial.
"A near term range of 61.30 to 62.30 could be possibly a
good bet for the rupee till the oil demand hits the market," he
said.
The partially convertible rupee closed at
61.625/635 per dollar compared with 61.74/75 on Friday. Local
stocks ended 1.25 percent down.
Dealers cited some bunched up inflows from foreign banks as
local markets were closed on Monday for a public holiday.
Inflows from a foreign telecom company was also cited as
helping the rupee, dealers said.
In the offshore non-deliverable forwards, the
one-month contract was at 62.21, while the three-month was at
63.21.
FACTORS TO WATCH
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* Foreign institutional investor flows
* For data on currency futures
