* Rupee ends at 58.71/72 per dlr vs 58.52/53 on Friday
* Cbank steps up dollar purchases to check rupee gains
* Sharp reversal in shares from session highs also hurts
By Swati Bhat
MUMBAI, May 26 The Indian rupee saw its biggest
decline in a month on Monday as investors covered short dollar
positions ahead of the swearing in ceremony of Prime
Minister-designate Narendra Modi, with all eyes set on the
allocation of key portfolios.
Investors are particularly keen on knowing who the country's
new finance minister is -- likely to be ex-Commerce Minister
Arun Jaitley, who is seen as the only obvious candidate for that
role, according to two sources in the ruling party.
Indian shares ended flat in a volatile session, giving up
earlier gains of nearly 2 percent due to profit-taking in
blue-chips such as IDFC while caution ahead of Modi's
ministerial appointments also weighed.
"We could see the pair target a high of 59.27-30 levels this
week. We have the GDP data this week, but that is likely to be
ignored. Market will be watching Modi and his team for cues,"
said Hari Chandramgethen, head of foreign exchange trading at
South Indian Bank.
The partially convertible rupee closed at 58.71/72
per dollar compared to 58.52/53 on Friday. The unit moved in a
wide band of 58.41 to 58.93 during the session. The rupee
dropped 0.3 percent on the day, in its biggest single-day fall
since April 23.
Dealers said the central bank was spotted buying dollars via
state-run banks after the rupee touched session highs while it
was also actively intervening in the forwards market.
In the onshore forwards, the one-year forward premium
rose to as much as 471.75 points from 463.25 points at
previous close while the six-month premium rose as high
as 249 points from 243.50 points.
In the offshore non-deliverable forwards, the
one-month contract was at 58.93 while the three-month was at
FACTORS TO WATCH
* Euro roughly flat after Eurosceptic surge
* Stocks support Asia FX in thin trading
* Bonds, stocks brush off Eurosceptic election gains
* Foreign institutional investor flows
* For data on currency futures
DIARIES & DATA:
Indian Data Watch European diary
Indian diary US Diary
(Editing by Sunil Nair)