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:

Economic Pulse

REUTERS SHOWCASE

Hope for SpiceJet

Hope for SpiceJet

Former SpiceJet owner leading rescue plan: reports.  Full Article 

Oil Prices

Oil Prices

Oil rallies above $60, heads for 4th weekly decline on glut.  Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Reuters Exclusive

Reuters Exclusive

Google aiming to go straight into car with next Android – sources.  Full Article 

Chinese Economy

Chinese Economy

China revises up size of 2013 economy, sees no effect on 2014 growth.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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