The Indian rupee quickly recovered from a weaker opening on Monday, but was unable to strengthen past 50 per dollar despite the stock market rising more than 2 percent in early deals.
At 10:40 a.m. (0510 GMT), the partially convertible rupee <INR=IN> was at 50.0600/0750 per dollar, little changed from its previous close of 50.09/12 on Friday. It had touched a record low of 50.60 on Nov. 20.
"The market is watching the stocks for fund flows, but the signals look very mixed so the market is unsure. The bias is however, towards buying (dollars)," said the chief dealer with a state-run bank.
"The rupee likely to stay in 49.90/50.30 band today," he added.
Indian shares .BSESN rose as much as 2.2 percent, with sentiment supported by a reshuffle of key government ministers after last week's deadly attacks on Mumbai.
Foreign funds have so far in 2008 sold a net $13.8 billion worth of Indian shares, after buying a record $17.4 billion last year.
Other dealers said the market was closely watching the central bank, both for intervention to support the currency and for any extra policy measures such as a rate cut to shore up the economy and confidence.
One-month offshore non-deliverable forward contracts were quoting at 50.86/51.01 per dollar, weaker than the onshore spot rate and indicating a bearish near-term outlook.
Source : Reuters India