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Rupee Trims Initial Gains, Still Up By 120 Ps; Sensex Gains

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The rupee trimmed its initial gains against the US currency, but was still quoted higher by 120 paise to 67.60 per dollar in the late morning trade on selling of dollars by banks and exporters in view of steps taken by Reserve bank of India yesterday (28 August) .
The battered rupee recovered after the Reserve Bank of India (RBI) yesterday said it has started a facility to meet the daily dollar requirement of the country's three state-run refiners.
The rupee resumed higher at 66.90 per dollar as against the previous closing level of 68.80 per dollar at the Interbank Foeign Exchange (Foerx) Market and firmed up further to a high of 66.85 per dollar.
However, it trimmed its initial gains and was quoted at 67.60 per dollar at 1040 hrs. It moved in a range of 66.85 per dollar and 67.71 per dollar during the morning deals.
Banks and exporters preferred to reduce their dollar position in view of recovery in the equity market. The benchmark Sensex rose by 201 points or 1.12 per cent to 18,197.33 at 1050 hrs.
However, in New York market, the dollar yesterday (28 Aug) rose against major currencies, including the pound, as investors continued to worry about a possible military strike in Syria.
Sensex Gains More Than 200 Points 
The BSE Sensex and the Nifty are up around 1 per cent, tracking a rebound in the rupee from a record low after the Reserve Bank of India's move to provide dollars directly to oil companies. The BSE Sensex fell 3 per cent while the Nifty slumped 3.5 per cent over the previous two sessions.
Traders say continued foreign selling and expiry of August equity derivative contracts later in the day may increase volatility in the second half of trade on Thursday, 29 August.
Foreign institutional investors sold about $1.12 billion worth of shares in the previous nine sessions through Wednesday, 28 August.
State-owned oil companies gain after the central bank's move on Wednesday to provide dollars directly to these companies. Indian Oil Corp, Hindustan Petroleum, and Bharat Petroleum each gain more than 1 per cent. 
Financial shares gain after steep losses in the previous two sessions are seen as overdone. Housing Development Finance Corporation up 6 per cent.