NEWS / Central Banks

Rupee gains as dlr dips abroad, shares eyed

MUMBAI - The rupee edged higher on Friday as the dollar weakened against Asian currencies, but traders were cautious on rising foreign fund outflows from the stock market.

At 9:45 a.m., the partially convertible rupee was about 0.2 percent higher at 46.24/25 per dollar, compared with the previous close of 46.34/35 and above a three-year low of 46.57 hit on Wednesday.

"The rupee opened higher at 46.28/30, tracking the firmness in other Asian currencies. There was some (dollar) selling by companies too," said a dealer with a private bank.

Asian currencies were mostly firmer against the dollar after data showed U.S. manufacturing growth had slowed to its lowest level since August. The data fuelled market speculation that U.S. policymakers may be content with a weaker dollar.

The U.S. unit had gained on Wednesday after minutes from a the Federal Reserve's May 10 meeting revealed concerns on inflation, raising expectations of further interest rate increases.

Dealers said they would watch the stock market for clues on fund outflows. Foreign investors have pulled a net $2.6 billion from the Indian stock market in 15 sessions to Wednesday.

India's benchmark share index was trading more than 1 percent higher in early trade, after sliding 3.2 percent on Thursday stretching losses to about 20 percent from an all-time high of 12,671.11 points on May 11.