Rupee snaps two-day fall as shares gain

The Indian rupee gained on Tuesday, snapping a two-session falling streak as gains in the domestic share market prompted good dollar selling by custodian banks, but month-end demand from importers limited a further rise.

Traders expect the rupee to remain in a broad 59.50 to 60.50 per dollar range until the federal budget on July 10.

Month-end demand for dollars from importers, particularly oil firms, is expected to keep a downward bias on the rupee over the week but foreign fund flows will be crucial for direction.

Most emerging Asian currencies firmed on Tuesday as improved manufacturing performance in major economies raised hopes for a stronger global recovery.

"There was good selling from custodian banks today and equally good buying seen from state-run

banks. Oilers were among the main buyers," said Hari Chandramgethen, head of foreign exchange trading at South Indian Bank.

"The pair is expected to hold in a 60.00 to 60.65 range during the week," he added.

The partially convertible rupee closed at 60.1325/1425 per dollar compared to 60.20/21 on Monday. The rupee moved in a range of 60.0775 to 60.1725 during the session.

Traders will continue to monitor the evolving global geopolitical situation and the domestic share market for clues in the near-term.

Indian shares rose over 1 per cent on Tuesday, snapping a four-day losing streak as blue-chips such as Reliance Industries gained on continued hopes of reforms while a fall in crude oil prices also helped.

In the offshore non-deliverable forwards, the one-month contract was at 60.44 while the three-month was at 60.99.