(Updates to open)
MUMBAI, Dec 13 (Reuters) - The Indian rupee was in a tight
range on Thursday with the market caught between possibilities of
foreign buying in the record-setting stock market, and the
possibility of central bank intervention.
At 9:40 a.m. (0410 GMT), the partially convertible rupee
<INR=IN> was at 39.36/37, a shade higher than the previous close
of 39.375/385. It hit 39.16 last month, its strongest since March
1998.
"It's going to be a rangish market till we get some solid
cues, and the stock market is one of them," said a dealer with a
public sector bank.
The main share index <.BSESN> hit a record high for the
second day on Wednesday, and dealers expect the rally to
continue, though weak Asian markets may cap gains.
Foreigners have bought Indian shares worth $1.1 billion in
the eight days to Tuesday, taking the total purchases since the
start of January to $16.9 billion.
Foreign buying of Indian shares has been a key driver of the
rupee this year, helping it gain nearly 12.5 percent, to be among
Asia's best performing currencies against the dollar.
Still, gains were limited as the dollar hovered near
one-month highs against the yen <JPY=> as the U.S. Federal
Reserve and other central banks announced measures to ease the
credit crunch and support financial firms struggling to secure
funds before the year-end.
The prospect of the Reserve Bank of India continuing to
intervene against the local unit, further weighed on sentiment,
dealers said.
The Reserve Bank of India bought $52 billion in intervention
in the first nine months of the year and is widely seen as having
played an active role in the rupee market in October and November
too.
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MARKET SNAPSHOT
Bombay Sensitive Index <.BSESN>
Indian rupee (/$) <INR=IN>
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(Reporting by C.J. Kurrien; Editing by Ranjit Gangadharan)
((Reuters Messaging: [email protected],
91-22-6636 9037))
Keywords: MARKETS INDIA RUPEE/