Rupee pares gains, domestic stocks falter

The rupee pared some of its earlier gains, tracking flat domestic equities; last trading at 55.03/04 vs 55.14/15 close on Friday.

The rupee had risen to as high as 54.7650 after headline inflation slowed to 7.25% in June from a year ago, which momentarily boosted stock markets on hopes the RBI would consider a cut in interest rates at its July 31 policy review.

However, the Sensex was flat on the day, after earlier gaining as much as 0.4%.

Traders cite caution as core inflation remains unchanged at around 4.85% from May levels, while Infosys drops for a third straight day.