India rupee falls as monsoon, swine flu woes loom

Wed Aug 12, 2009 5:53pm IST

Related Topics

* Strong factory output help rupee off two-week low

* Pull back in shares from over 2 pct fall also helps

* Traders await monsoon forecast update on Thursday (Updates to close)

By Swati Bhat

MUMBAI, Aug 12 (Reuters) - The Indian rupee fell on Wednesday as deficient monsoon rains and worries over the spread of swine flu weighed, but it crawled back from two-week lows after the stock market trimmed sharp losses.

The partially convertible rupee INR=IN ended down 0.8 percent at 48.37/38 per dollar after hitting 48.50, its lowest since July 30, compared with Tuesday's close of 47.97/98.

"There was dollar buying by foreign institutional investors. The industrial output figure was better than expected but the impact was not much on account of worries about the monsoon and swine flu," said Puneet Sharma, chief foreign exchange dealer at state-run Allahabad Bank.

June industrial output expanded at its fastest pace in 16 months, beating forecasts by a wide margin, as higher salaries of government employees and stimulus spending boosted consumer demand. [ID:nBOM167869]

H1N1 pandemic flu is spreading in India, Thailand and Vietnam with the onset of Asia's monsoon season, the World Health Organisation (WHO) said on Tuesday. [ID:nLB713194]

Dealers said they would watch the monsoon forecast update on Thursday for clues of the impact on the broader economy.

"The outlook is rupee positive. The monsoon data tomorrow may be somewhat better than what we have seen so far. I expect the rupee to open around 48.25 levels and then the overnight dollar moves and Asian stocks would provide direction," Sharma said.

The monsoon rainfall deficit widened by one percentage point from the previous day to 29 percent on Aug. 10, with rains in the soybean-growing central region weakening. [ID:nISL372941]

One-month offshore non-deliverable forward contracts PNDF were at 48.39/49, marginally weaker than the onshore spot rate.

In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX closed at 48.4025 and 48.4150 respectively, with the total traded volume on the two exchanges at a high $2.2 billion. (Editing by Ranjit Gangadharan)

FILED UNDER:
  • Most Popular
  • Most Shared

DEFENCE

REUTERS SHOWCASE

Canonisation

Canonisation

Pope declares sainthood of two Indians, four Italians.  Full Article 

Stake Sale Strike

Stake Sale Strike

Coal India trade unions call off strike in victory for Modi.  Full Article 

Markets Weekahead

Markets Weekahead

Ride the bull with a finger on the ejector button.  Full Article 

Arms Purchase

Arms Purchase

India approves $2.6 bln mounted gun purchase - official.  Full Article 

Interview with Bulgari CEO

Interview: Bulgari CEO

Bulgari CEO: we shouldn’t have left India so we’re back  Full Article 

Formula One

Formula One

Hamilton takes second F1 title in style.  Full Article 

Available For Remake

Available For Remake

Bollywood finally wants to pay the price for remakes  Full Article 

Davis Cup

Davis Cup

Vintage Federer seals first Davis Cup for Switzerland.  Full Article 

Movie Review

Movie Review

"Happy Ending" is old wine in an older bottle  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage