Rupee gives up gains after touching 1-wk high

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The rupee eased after rising to its strongest in more than a week on Thursday, as traders shifted focus to lower Asian stocks from a weaker dollar.

At 10:30 am (0500 GMT), the partially convertible rupee was at 46.24/25 per dollar after hitting 46.1350, its strongest since November 17. It closed at 46.21/22 on Wednesday. The dollar fell to a 14-year low versus the yen and hit a 1-1/2 year low on the Swiss franc.

"That was the trigger for the rupee to open strong. But going forward we see little recovery with stocks in Asia trading weak," said a trader with a foreign bank.

India's benchmark BSE index opened weaker, tracking other markets like Tokyo's Nikkei, Hong Kong's Hang Seng and Seoul's Kospi.

Foreign portfolio buying of about USD 15.3 billion of stocks this year has helped the rupee rise nearly 13% from a record low of 52.2 in early March.

India can absorb USD 100 billion of capital inflows, nearly double what is expected this year, before it needed to take strong restrictive measures, C. Rangarajan, chairman of the prime minister's Economic Advisory Council, told Reuters on Tuesday.

One-month offshore non-deliverable forward rupee contracts were at 46.25/35.