India rupee falls on euro zone woes; reforms watched

Thu Nov 8, 2012 5:09pm IST

Related Topics

* Rupee ends at 54.36/37 per dlr vs 54.2050/2150 on Wed

* Sentiment on rupee turns bearish, Reuters poll shows

* Nomura advises investors to short USD/INR via options in near term

By Subhadip Sircar

MUMBAI, Nov 8 (Reuters) - The Indian rupee fell on Thursday, snapping two sessions of gains, as euro zone concerns again took centrestage with worries over whether Spain would seek a bailout soon.

The rupee's gains from U.S. President's Barrack Obama's re-election were wiped out as global stocks and the euro fell, pulling down the local currency with it.

Local shares ended down 0.3 percent, ending a six-day winning streak.

"We believe a lot of positive news has already been priced in and we reduce our bias on short USD/INR into year-end," said Vivek Rajpal, strategist at Nomura in Mumbai.

The investment bank expects the rupee to trade at 53 to the dollar by end-December and advises investors to short USD/INR through options in the near term.

The partially convertible rupee closed at 54.36/37 p er dollar, 0.3 percent weaker than its previous close of 54.2050/2150.

Investors will closely watch how the government manages its finances and whether it can push through key reforms on insurance and pensions when parliament meets later this month.

The government is hopeful of containing its fiscal deficit to 5.3 percent of GDP in this fiscal year, but a recent Reuters poll pegs it at 5.8 percent.

Sentiment on the Indian rupee turned bearish once again after some signs of optimism in the last two months, as per a Reuters poll of currency strategists.

In the offshore non-deliverable forwards segment, the one-month contract was at 54.62 while the three-month was at 55.19.

In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange and the MCX-SX closed at around 54.55 with a total traded volume of $4.6 billion. (Editing by Sunil Nair)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

TCS Results

TCS Results

TCS net profit rises 51.5 percent, sees stronger sales growth.  Full Article | Quote 

Google Results

Google Results

Google Q1 revenue misses Wall Street targets.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Sparking Boom

Sparking Boom

BlackBerry: the crash that launched 1,000 start-ups.  Video 

Telecom Sector

Telecom Sector

RComm to raise mobile call tariff by up to 20 percent  Full Article 

Chinese Economy

Chinese Economy

China economic growth slows to 18-month low in first quarter  Full Article 

Breakingviews

Breakingviews

Diageo throws money at Indian empire-building  Full Article 

Reuters India Mobile

Reuters India Mobile

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