Rupee climbs most in 2 weeks

The rupee gained the most in more than two weeks after the nation’s second-largest software exporter reported profit that beat analysts’ estimates.

The currency rebounded from a one-week low as the Bombay Stock Exchange Sensitive Index gained 2.6 per cent. Infosys Ltd said net income was $390 million last quarter. The rupee fell earlier on concern Europe’s debt problems will damp demand for emerging-market assets.

“On one hand, we have news such as that from Infosys which suggests exports and the economy may not perform as badly as some believe, and on the other, the European problems are not yet gone,” said Krishnamurthy Harihar, treasurer at FirstRand Ltd in Mumbai. “The rupee will likely stay in a range until we have stronger cues.”

The rupee strengthened 0.8 per cent to 48.96 per dollar in Mumbai, according to data compiled by Bloomberg, the biggest advance since September 27. It dropped to 49.4750 earlier, the weakest level since October 5.

Slovakia’s parliament failed to ratify changes to a bailout fund for the euro region in a vote yesterday. European officials are striving to meet an end-of-month target set by French President Nicolas Sarkozy to get to grips with a crisis that’s propelled Greece to the brink of default and shaken global financial markets.

BONDS FALL
Government securities fell on fresh selling by banks and companies.

The 7.80 per cent government security maturing in 2021 dropped to Rs 94.04 from Rs 94.2350 yesterday, while its yield recovered to 8.74 per cent from 8.70 per cent. The 8.08 per cent government security maturing in 2022 also declined to Rs 95.3250 from Rs 95.53, while its yield rose to 8.86 per cent from 8.72 per cent previously.

The 7.83 per cent government security maturing in 2018 dipped to Rs 95.60 from Rs 95.7575, while its yield improved to 8.73 per cent from 8.70 per cent. The 8.13 per cent government security maturing in 2022, the 8.07 per cent maturing in 2017 and the 7.99 per cent maturing in 2017 finished lower at Rs 95.6325, Rs 97.3550 and Rs 96.7500, respectively.

The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 57,795 crore from 22 bids at one-day repo auction at a fixed rate of 8.25 per cent.

CALL RATE DIPS
The call rate closed slightly lower on the overnight call money market on Wednesday on better liquidity in banking system. The overnight call money rate settled slightly weak at 8.25 per cent from 8.30 per cent yesterday. It moved in a narrow range of 8.35 per cent and 8.20 per cent.