Rupee rebounds 8 paise against dollar to end at 61.86

Mumbai: After breaching the 62-mark in early trade, Indian rupee on Tuesday rebounded and ended with a gain of 8 paise at 61.86 against the Greenback on account of suspected RBI intervention through state-owned banks.

Despite a sharp sell-off in local stocks and lower dollar value ahead of key US economic data release, the Indian rupee showed strength, traders said, adding that strong capital inflows to equity and debt markets also provided support.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed slightly lower at 61.95 and later slumped to 62.04 on the back of strong dollar demand.

However, selling of dollars by banks and some exporters helped the local unit clock a sharp recovery to conclude at 61.86, a rise of 8 paise or 0.13 per cent. It touched a high of 61.8425 in intraday trade.

The rupee had lost 18 paise to close at 61.94 yesterday, marking its first loss in three sessions. Meanwhile, the US dollar index was trading almost flat against a basket of currencies.

The Indian benchmark S&P BSE Sensex snapped its record breaking journey and slumped by about 161 points, or 0.57 per cent, to conclude at 28,338.05. Provisional data released by stock exchanges showed that Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 407.42 crore on Monday.

"We expect the Rupee to trade within the support of 61.64 and resistance of 62.17 tomorrow and either side break out could give us further price direction," said Suresh Nair, Director, Admisi Forex. In the forward market, premia closed mixed.

The benchmark six-month premium payable in April closed lower at 199-201 paise from Monday's close of 204-206 paise. Forward contracts maturing in October, 2015, gained to 429-432 paise from their previous closing level of 428.5-430.5 paise.

The Reserve Bank of India fixed the reference rate for dollar at 61.9195 and for the Euro at 76.9288. The rupee rebounded against the pound to 96.97 from last close of 97.00, it fell further to 76.93 per euro from 76.87.

It, however, strengthened slightly to 52.37 per 100 Japanese yen from 52.41 previously.