Rupee turns stronger, gains 52 paise at 48.28/29 a dollar

MUMBAI: Rupee bounced back with a vengeance after breaching the crucial 49 level, only to end 52 paise stronger at 48.28/29 against the greenback on heavy dollar selling in the latter part of the day.

The rupee had fallen to a one-month low of 49.28 against the dollar in early trade after the scandal in India's fourth-largest software exporter Satyam Computer sparked fears about capital outflows.

Resuming weaker at 49.20/21 a dollar from its previous close of 48.80/81 a dollar, the rupee later fluctuated between 48.28 and 49.28 during the day, partly influenced by movements in local stocks.

Dealers at the Interbank Foreign Exchange (forex) market said foreign and private sector banks heavily sold dollars in the latter part of the day amid reports that foreign investments may not be affected in the aftermath of the country's biggest corporate fraud.

Leading fund managers reportedly ruled out the possibility of any capital outflow because of the Satyam scandal.

Despite the dollar's firmness against major world currencies in global markets, they said a sudden bout of dollar sales led a strong recovery in the rupee, which was under pressure in early trade due to weakness in equity markets.

The rupee also drew support from the absence of any dollar demand from oil refiners during the day.

The Indian benchmark Sensex shed another 180.41 points or 1.88 per cent today even as Asian indices ended lower.