* Rupee ends at 61.08/09 per dlr vs 61.11/12 on Thu
* Indian shares hit record high
* Reuters poll shows rupee expected to weaken marginally
By Subhadip Sircar
MUMBAI, March 7 (Reuters) - The Indian rupee rose to a near
three-month high against the dollar on Friday, posting its best
week since early December, as heavy foreign buying sent shares
to record highs although the currency ended the session with
only a slight gain.
India's broader NSE share index and the benchmark
BSE index both hit record highs, after foreign
investors on Thursday posted their biggest daily purchases since
Dec. 19, amounting to a net 13 billion rupees ($212 million),
and marking a 15th consecutive buying session.
Overseas funds have also become strong buyers of debt, with
net purchases of $5.6 billion so far this year.
Analysts attribute the growing foreign confidence in India
to the government's success at narrowing the current account
deficit by curbing gold imports, as well as to the central
bank's action to tame high inflation by raising interest rates.
Still, global uncertainties remain, with tensions lingering
in Ukraine. Meanwhile, U.S. monthly jobs data due later in the
day could set the tone in global markets by early next week.
"Our view on INR remains tactically constructive as a carry
target, as we expected current account conditions to remain
supported at least until the government lifts gold
restrictions," said Sacha Tihanyi, senior currency strategist at
"However, we cannot turn structurally bullish on the rupee
until inflation and inflation expectations come down
significantly," he said.
The partially convertible rupee closed at 61.08/09
per dollar compared with 61.11/12 on Thursday. The unit rose as
high as 60.945, its strongest since Dec. 9. For the week, it
rose 1.1 percent, its best performance since the week ended Dec
Traders will also be tracking cash conditions given advance
tax outflows in mid-March tend to tighten liquidity. Near-term
forward premiums spiked on fears of cash tightening and as
traders said that a large state-run bank bought to meet oil swap
The 1-month forward premium was last at 52.75
points vs 51 points at Thursday close. It rose to 54.25 points,
last seen in early October, as per Reuters data.
A Reuters poll on Friday also cast doubt about whether the
rupee can sustain the gains, showing the currency trading at 62
to the dollar in a month, at 63.25 in six months and at 63.60 in
In the offshore non-deliverable forwards, the
one-month contract was at 61.41 while the three-month was at
FACTORS TO WATCH
* Euro hits 2014 high Vs dollar, may get boost from U.S. data
* Yuan rebound, firm stocks help Asia FX weekly gains
* Buoyant stocks await payrolls, ECB inaction spurs euro
* Foreign institutional investor flows
* For data on currency futures
DIARIES & DATA:
Indian Data Watch European diary
Indian diary US Diary
(Editing by Anupama Dwivedi)