Rupee gains on rise in shares, robust U.S. data

By Gaurav Pai

MUMBAI (Reuters) - The rupee gained on Friday as a rise in local shares along with positive U.S. unemployment and industrial output data helped sentiment, but traders remain cautious given the uncertainties about global economic growth.

On the week, however, the rupee fell, declining in five of the last six weeks. Markets will be shut next Thursday and Friday due to national holidays.

All eyes are now on Chinese growth data due next week. Global markets could be in for another bout of selling if China's third quarter GDP numbers are dismal and the government promises no stimulus, say traders.

Most Asian currencies ended the day firmer as solid U.S. economic data eased concerns over global growth.

The number of Americans filing new claims for jobless benefits fell to a 14-year low last week and industrial output rose sharply in September, positive signals that helped ease fears over the economic outlook.

The head of the St. Louis Federal Reserve Bank, James Bullard, also said the U.S. central bank may want to keep up its bond-buying stimulus for now due to a drop in inflation expectations.

"The sentiment is positive for the rupee. The pair is likely to trade in a range of 61-61.60 in the near term. We have seen that when the pair hits either extremes, it usually reverses direction," said Vishweshwara M, assistant general manager, treasury, at Karnataka Bank in Mumbai.

The partially convertible rupee closed at 61.44/45 per dollar compared with 61.8350/8450 on Thursday.

Indian shares rose on Friday, led by stocks of domestic oriented companies including lenders such as HDFC Bank on value buying and hopes a likely win for the BJP in two recent state elections would help push key reforms.

In the offshore non-deliverable forwards, the one-month contract was at 61.75/85 while the three-month was at 62.38/48.

(Editing by Anupama Dwivedi)