Rupee hovers around 64 per dollar, Sensex choppy

The Indian rupee and stock markets were choppy on Friday amid uncertain global cues. The rupee traded at 63.58, not far from Thursday's close at 63.50 per dollar as of 2 p.m.

The rupee saw sharp recovery after earlier falling to 64.18 per dollar. Reuters cited custodial flows related dollar selling by foreign banks for the recovery. Corporate inflows cited from a large petrochem company and a mid-sized private oil refiner also supported the rupee.

The rupee may gain to 63.30-63.35 per dollar if 63.65 levels are sustained, technical analysts said. Foreign funds have bought over $1 billion worth of shares in the cash market over the last six sessions, helping sentiments, analysts said.

Markets were choppy, but the key benchmarks traded off the day's lows as of 2 p.m. The BSE Sensex traded 0.11 per cent lower at 19,759, while the Nifty traded flat at 5,854.

Capital good shares gained after industrial production unexpectedly rebounded in July while consumer inflation cooled last month, offering some relief for policymakers who have been battling the country's worst economic crisis in more than 20 years.

Larsen and Toubro and Bharat Heavy Electricals were among the top Nifty gainers.

Earlier, markets headed lower after the Prime Minister's economic panel suggested it would be a challenge for the government to meet its fiscal deficit target of 4.8 per cent of GDP in the current year.

High deficit will fuel inflation and hurt investments in India. The panel also said the current stance of the monetary policy needs to be continue until the rupee stabilises, further hurting bonds.

Global cues were cautious ahead of a key U.S. Federal Reserve meet next week. The Fed is expected to reduce its $85 billion a month bond-buying programme at its two-day policy meeting ending on Sept 18.


(With inputs from Reuters)