Rupee gains on PowerGrid share sale inflows

The rupee rose on Wednesday, helped by foreign inflows tied to a $1.1-billion worth share sale from PowerGrid Corp of India, a state-run power transmission utility, even as other emerging market currencies were hit by fears of early tapering of the US monetary stimulus. The gains in the rupee masked a rising sense of caution across markets ahead of the results of elections in several states.

Investors were also trading carefully ahead of US economic growth data on Thursday and monthly employment data on Friday, which would help set expectations for the timing of any tapering by the Federal Reserve.

The partially convertible rupee closed at 62.05/06 a dollar, compared with 62.36/37 on Tuesday. It rose 0.5 per cent, its biggest single-day percentage gain in a week.

Bonds drop further
Government securities (G-secs) dropped further on sustained selling pressure from banks and companies. The 7.16 per cent G-sec maturing in 2023 remained weak at Rs 87.92, against Rs 88.04 on Tuesday, while its yield edged up to 9.09 per cent from 9.07 per cent.

Call rates advance
Call rates ended higher at the overnight market due to renewed demand from borrowing banks. The rate rose to end at 7.1 per cent from 6.78 per cent on Tuesday.