Indian rupee opened strong, around 59.95 levels on spot, as US dollar was on the backfoot against major Asian currencies. A fall in oil prices helped sentiments. Domestic equities opened strong. However, demand from oil marketing companies and state run banks, pulled the American currency back towards 60.25/26 levels on spot.
Worries surrounding Monsoon and still continuing tensions in Middle East are not allowing the rupee to appreciate meaningfully. This week, traders will keep a close eye on the PMI survey data for the month of June.
In economic data, in production of fertilizers, cement, electricity and coal, output of the eight core sectors grew 2.3% in May. Core sector growth rose by 4.2% in April this year. In May, fertilizers, cement, electricity and coal, which grew by 17.6%, 8.7%, 6.3% and 5.5% respectively.
Over the near term, a range of 59.80/90 and 60.50/80 can be seen. A poor Monsoon and continuing tensions in Middle East can cause short term depreciation in the rupee.
By Anindya Banerjee, Analyst, Kotak Securities