Rupee gains as stocks rise, dollar falls

The partially convertible rupee closed at 46.31/32 per , 0.4 per cent stronger than its Monday's close of 46.50/52. "The crosses were back on fire today, the finance minister's statements on divestment and easing fears about the Dubai crisis, all together helped the rupee," said Nitesh Kumar, an inter-bank dealer with Development Credit

(DCB).

The index of the dollar, a gauge of its performance against six major currencies, was down 0.5 per cent. India will not sell more than 10 per cent in listed state-run firms "at this stage," and would time sales to get maximum value, Finance Minister Pranab Mukherjee told parliament on Tuesday.

The sharemarket rose 1.6 per cent, and has now reclaimed all of its losses at the end of last week when global markets were rattled by Dubai's debt problems.

Foreign buying of local about $15.4 billion this year has helped the rupee recover from a record low of 52.2 hit in early March. Last year, outflows of more than $13 billion had pushed the local unit down by a fifth. "Even the forward premiums rose today, in line with the positive rupee sentiment. Importers booked forward contracts finding current levels attractive," DCB's Kumar said. Six-month forward premium rose to a high of 58.5 points on Tuesday after they had hit a four-month low of 51 points in the previous session. One-month offshore non-deliverable forward contracts were at 46.27/37, little changed from the onshore spot closing rate.

In the currency futures market, the most traded near-month contracts on the National and MCX-SX closed at 46.3950 and 46.4050 respectively, with the total traded volume on the two exchanges at about $3.1 billion.