Rupee back to square one after initial fall; Daily Rupee Markets Commentary

The rupee opened at 43.78 and slipped to 43.7950 on the expectations of faster fed rate hikes, after the Federal Reserve hinted rising inflationary pressures which lifted the U.S. unit against the majors overnight. Soon the rupee cut some of its losses to trade at 43.7375 against the U.S. dollar, due to the inflow of about $350 million from the sponsored American Depository Share issue of ICICI Bank (ICBK.BO, news) . ICICI Bank's sponsored American Depositary Shares (ADS) offering has been registered with the US Securities and Exchange Commission and has been priced at $21.11 per ADS. Only a part of the inflow from the ICICI Bank issue has hit the market and rest of the inflows are expected towards the close of trade today. The rupee, however, has not recovered significantly despite the inflows because banks and companies continued to buy dollars. Sentiment is jittery and traders are reluctant to take fresh positions against the dollar at such times with rising global crude oil prices continuing to dampen the rupee bullish sentiment. Dollar inflows, following the Global Depository Receipt issues of some private banks, are expected into the market in the next few days. The premiums on forward dollars are trading steady with the benchmark 6-months quoting at 32 paise barely unchanged from yesterday's closing of 32.5 paise. Following the massive fall yesterday, the BSE Sensex was in the red again today, down by 22 points to 6,513. The market breadth is negative, but modest gains are seen in some of the steel, cement, and auto stocks following some value buying at lower levels. Crude declined to $55.60 per barrel on reports of a slowdown in Chinese imports.

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