Rupee recovers from session lows on bunched $ inflows

The rupee weakened for a fourth session in five on Tuesday as shares retreated on worries that a recent record-setting rally might have gone too far, although bunched up dollar inflows continued to provide some support. The NSE index fell 0.6 per cent to mark its biggest fall since March 3, as interest-rate sensitive shares fell after wholesale inflation hit a three-month high, casting doubts on a market that recently hit its life-time high.

The partially convertible rupee closed at 60.23/24 a dollar on Tuesday, compared with its Friday's close of 60.17/18. The retreat in shares kept the rupee under pressure, with data after the close of markets on Friday showing industrial output unexpectedly shrank 1.9 per cent year-on-year in February.

Bonds close mixed
Government securities (G-secs) closed mixed on alternate bouts of buying and selling. The 8.83 per cent G-sec maturing in 2023 declined to Rs 99.20 from Rs 98.28, while its yield edged up to 8.95 per cent from 8.94 per cent.

Call rates remain firm
Call rates improved further on lack of liquidity in the banking system. The call money rates moved in a range of 8.95 per cent and 8.20 per cent before closing at 8.50 per cent.