Rupee swings up, 10-year bonds trim losses on market talk of S&P upgrade

The Indian rupee rose sharply in late trade after moving in a narrow band for most of Thursday following market talk of a potential sovereign ratings upgrade by Standard & Poor's.

The Indian rupee ended at 64.58 to the dollar after moving in a range of 64.5675-64.8900 during the day, and compared with Wednesday's close of 64.92.

The 10-year benchmark bond yield also cooled off from its highs and ended at 6.99 percent after rising to 7.02 percent. It had closed at 6.96 percent on Wednesday.

Speculation about a India ratings upgrade surfaced after TV channel BTVI reported, citing sources, that S&P will announce its rating review on Friday.

In an email reply to Reuters, S&P said: "We never comment on speculation about our ratings."

Expectations that the other two international ratings agencies - S&P and Fitch - could also better India's sovereign rating sooner than later has been gaining steam after a surprise upgrade by Moody's last week.