The non-deliverable forwards indicate the rupee will open at around 82.60 to the dollar compared with 82.73 in the previous session. Following the positive opening, the rupee will be hindered by the 82.50 support (on USD/INR) and "what we think is likely to be perceived a mere temporary relief rally on equities," said a trader at a Mumbai-based bank.
Asian shares were mostly higher, taking support from the overnight rally on their U.S. peers. The S&P 500 Index climbed 1.8%, boosted by news that a large group of banks were infusing cash into U.S. lender First Republic Bank. Eleven U.S. banks, including JPMorgan Chase & Co, will deposit $30 billion into First Republic Bank, swooping in to rescue the lender caught up in a widening crisis triggered by the collapse of two other mid-size U.S. lenders. This "provided some much-needed reassurances to mitigate further banking jitters," Yeap Jun Rong, market strategist at brokerage firm IG Asia, said. The recovery in shares of European lender Credit Suisse, after it received help from Switzerland's central bank to shore up its liquidity, further helped revive risk appetite.
However, the revival will have to contend with interest rate hikes by central banks despite the strains in the banking sector. The European Central Bank on Thursday raised interest rates by 50 basis points (bps). Futures indicate that the U.S. Federal Reserve will most likely raise rates by 25 bps next week. Robust U.S. labour market data alongside the rally in equities and the ECB rate hike prompted investors to price in an 80% chance of a 25 bps rate increase.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.80;
onshore one-month forward premium at 18.75 paise
** USD/INR NSE March futures settled on Thursday at 82.85; Mar
forward premium at 4 paise
** Dollar index down at 104.20
** Brent crude futures up 0.6% at $75.1 per barrel
** Ten-year U.S. note yield at 3.57%
** SGX Nifty nearest-month futures up 0.7% at 17,144
** As per NSDL data, foreign investors sold a net $151.1 mln
worth of Indian shares on Mar. 15
** NSDL data shows foreign investors bought a net $14.7 mln
worth of Indian bonds on Mar. 15
(Reporting by Nimesh Vora; Editing by Janane Venkatraman)
