RUPEE: WEIGHED DOWN BY S&P MOVE
DATE: 26/04/2012
The Indian rupee commenced slightly higher on Thursday, April 26, 2012 tracking weakness in the US dollar overseas, but gains remained short lived as the domestic currency edged back lower to previous day closing levels. Rupee opened up by 7 paise at Rs. 52.47 to a dollar and slipped back to a low of 52.54 registered so far during the day. On the upside, the domestic unit touched a high of 52.43 during early hours. Local equities however, continued to be battered after fresh news that Standard & Poor's cut India's credit rating outlook on Wednesday to negative from stable, reflecting the toll that hefty fiscal and current account deficits and political paralysis are exacting on Asia's third-largest economy. The negative outlook jeopardizes India's long-term rating of BBB-, the lowest investment grade rating. This is likely to hamper foreign investments in India and weigh on Indian equities and currency alike. In the spot currency market, rupee was last seen trading at 52.54, almost unchanged as compared to previous close.
Rupee came off early gains after local equities extended its sluggish mode for Thursday. Key benchmark indices alternately moved between positive and negative terrain near the flat line in morning trade and tripped into the negative alongside most Asian shares that reversed initial gains. Global crediting rating agency S&P said on Wednesday, 25 April 2012, revised its outlook on India's long-term rating to negative from stable. Besides, the ratings also revised the rating outlooks on Infosys, TCS and Wipro to negative from stable. Foreign institutional investors (FIIs) sold Indian shares worth Rs 340.84 crore on Wednesday, as per provisional data from the stock exchanges. FIIs have sold shares worth Rs 1609.10 crore in three days from 23 to 25 April 2012 as per the provisional data. At the time of writing, India's key benchmark BSE Sensex is down 38 points at around 17112 while S&P CNX Nifty is lower by 14 points to be at 5187.
Meanwhile, weakness in the greenback managed to keep rupee propped up alongside most regional peers. The U.S. dollar faltered to a three-week low against a basket of major currencies overnight and extended losses to Thursday, after the Federal Reserve did little to alter the perception that the central bank will be deeply committed to a dovish policy stance. Chairman Ben Bernanke said the central bank would not hesitate to launch another round of bond buying if the economy needed it. The fall in euro zone sovereign yield spreads overnight also helped to push the euro up above its peak last week versus the dollar. The pair hit a high of 1.3233 and is currently seen quoting at 1.3220.
In the domestic currency futures market on the NSE, the forwards month 26 April '12 contract opened on Thursday, April 26, 2012 at 52.54, higher than the spot market rupee. The contract hit an intraday high at 52.58 and registered a low at around 52.42 so far during the day. At the time of writing, the NSE April 2012 USD/INR contract was trading at around 52.57, almost unchanged as compared to previous close.
Rupee came off early gains after local equities extended its sluggish mode for Thursday. Key benchmark indices alternately moved between positive and negative terrain near the flat line in morning trade and tripped into the negative alongside most Asian shares that reversed initial gains. Global crediting rating agency S&P said on Wednesday, 25 April 2012, revised its outlook on India's long-term rating to negative from stable. Besides, the ratings also revised the rating outlooks on Infosys, TCS and Wipro to negative from stable. Foreign institutional investors (FIIs) sold Indian shares worth Rs 340.84 crore on Wednesday, as per provisional data from the stock exchanges. FIIs have sold shares worth Rs 1609.10 crore in three days from 23 to 25 April 2012 as per the provisional data. At the time of writing, India's key benchmark BSE Sensex is down 38 points at around 17112 while S&P CNX Nifty is lower by 14 points to be at 5187.
Meanwhile, weakness in the greenback managed to keep rupee propped up alongside most regional peers. The U.S. dollar faltered to a three-week low against a basket of major currencies overnight and extended losses to Thursday, after the Federal Reserve did little to alter the perception that the central bank will be deeply committed to a dovish policy stance. Chairman Ben Bernanke said the central bank would not hesitate to launch another round of bond buying if the economy needed it. The fall in euro zone sovereign yield spreads overnight also helped to push the euro up above its peak last week versus the dollar. The pair hit a high of 1.3233 and is currently seen quoting at 1.3220.
In the domestic currency futures market on the NSE, the forwards month 26 April '12 contract opened on Thursday, April 26, 2012 at 52.54, higher than the spot market rupee. The contract hit an intraday high at 52.58 and registered a low at around 52.42 so far during the day. At the time of writing, the NSE April 2012 USD/INR contract was trading at around 52.57, almost unchanged as compared to previous close.
| RBI REF RATE | ||||
| Date | USD | GBP | EURO | YEN |
| 25-APR-12 | 52.49 | 84.66 | 69.25 | 64.50 |
| % Change* | 0.58 | 0.60 | 0.40 | 1.15 |
| *As against previous working day | ||||
POWERED BY: COMMODITY INSIGHTS
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