The partially convertible rupee closed at 49.03/04, 1.1 percent stronger than its previous close of 49.58/59. It rose as much as 48.88, which was its strongest since Nov. 17.
"The rupee rallied today as stocks were positive and there was some non-deliverable forwards (NDF) related dollar selling seen," said the chief dealer with a state-run bank.
"The rupee's direction will now depend on the flows and movement in NDF but the dollar-rupee may not go below 48.50. So a broad range of 48.50-49.50 would hold for some time," he added.
Indian shares rose 5.4 percent to their highest close in a month, led by Reliance Industries as foreign funds picked select blue chips, but investors remain worried by a deteriorating economic outlook.
Foreign funds have bought a net $237.9 million worth of Indian shares in the last three sessions, but are net sellers of $13.6 billion so far in 2008. Last year they had bought a record $17.4 billion.
One-month offshore non-deliverable forward contracts were quoting at 49.10/25, almost steady compared to the onshore spot rates, indicating a reversal in trend compared to a weaker bias in recent weeks.
"This I see only as a temporary trend reversal," said V.Kumar, chief dealer at State Bank of Travancore. "With recession setting in all major economies, the trend is likely to be bearish again without much of delay."
via : http://in.reuters.com/article/businessNews/idINIndia-36952720081210
