INR at 5-months high 46/$

INR at 5-months high; extends 3.2% rally in the previous session; IT stocks down

INR extends 3.2% rally in the previous session and is trading at 5 month high levels. Indusind Bank said that the rupee’s gains will stay limited and move into consolidation mode within a 47.60-48.30/$ band. Barclays has revised Q1 2010 USD/INR, Q4 2009 USD/INR forecasts to 44 and 45, respectively, from 47. An impact of this is seen on IT companies’ shares which are down considerably.The Indian rupee touched a 4-month high yesterday. It breached 48 level on the upside. The US dollar depreciated by a whopping 150 paise to 47.91 against the Indian rupee on expectations of increased capital inflows after the Parliamentary elections results displayed a clear mandate for UPA as a single political party in the country.

IT major Infosys feels that the rupee move is more on sentiments, and is not backed by the fundamentals. Government has to take a definitive action to enhance money flows to change stance, it added.

Another IT major TCS said that it is difficult to take a call on rupee move beyond 46/$. The company feels that the confident structure program will protect downside and margins. The company has not changed its hedging policy drastically and continue to hedge revenue receivables, it informed.

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