Rupee at 8-month high

Mumbai, March 28: The rupee today breached the 60-levels to the dollar and hit an eight-month high against the greenback on robust inflows from foreign institutional investors (FIIs).

At the inter-bank foreign exchange market, the currency ended at 59.91 to the dollar, after shooting up to a day’s high of 59.68 per dollar as FIIs continued to pour money into both stocks and bonds.

The foreign investors have made net investments of around $3.7 billion into equities and more in bonds.

Forex circles said the rupee would have ended higher against the greenback today had it not been for the dollar purchases from the Reserve Bank of India (RBI) on more than one occasion.

The central bank, keen to bolster India’s forex reserves, is understood to have bought dollars when the rupee was at 60 and 59.85 to the dollar.

The domestic currency began on a strong note against the dollar in early trade at 60.12 on higher inflows from FIIs along with sales of the greenback by banks and exporters.

The strengthening of other currencies against the dollar overseas also supported the rupee.

The domestic currency finally settled at 59.91, a surge of 40 paise, or 0.66 per cent, from its previous close.

Forex circles say the currency is likely to continue its gains against the US unit over the coming days, though for the immediate term, the focus will be on the RBI monetary policy that will be announced next Tuesday.

They, however, added that the currency might sharply weaken if the general elections threw up a fractured verdict.

Dream run for stocks

On the equity markets, the Sensex scaled a new high for the fifth straight day today but ended a little lower at 22339.97, which is its fresh closing record. It set an all-time record of 22363.97 points intra-day.

Provisional data from the stock exchanges showed that the foreign investors made net purchases to the tune of Rs 1,363 crore.

The 50-stock Nifty of the NSE also shot up 54.15 points to record a closing high of 6695.90, after hitting a life-time high of 6702.60 during intra-day trades.

There are optimists in the market who feel that the Nifty may hit 6900 to 7000 levels before results to the general elections are announced in the middle of May.