Rupee largely steady; oil demand weighs

The rupee was largely steady in the afternoon session on Tuesday as dollar demand from oil firms offset positives following domestic share gains.

At 1:40 pm, the partially convertible rupee was at 45.52/53 per dollar, unchanged from its close on Monday when it reached a seven-week low of 45.6250. Traders said there was good dollar demand from oil firms who are the largest buyers of dollars in the domestic currency market. The market however was underpinned by expected foreign inflows toward a follow-on share sale by Tata Steel, the world's seventh-largest steel maker that aims to raise as much as Rs 3,477 crore (USD 764 million) this month. One-month offshore non-deliverable forward contracts were quoted at 45.80, weaker than the onshore spot rate. The main stock index was trading up about 0.6% on the back of gains in financials and software shares, but the outlook remains uncertain after a sell-off in the first two weeks of the new year. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and the United Stock Exchange were all at 45.61 with the total traded volume on the three exchanges at about USD 2.9 billion.