India rupee falls on euro zone woes; reforms watched
* 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)
- Tweet this
- Share this
- Digg this
- UPDATE 8-Dallas Ebola patient vomited outside apartment on way to hospital
- Boxer Sarita Devi faces action after refusing medal at Asian Games
- Appointment of Arvind Subramanian as chief economic adviser hits Modi hurdle
- Putin says Russia wants to move to national currencies in trade
- China tells foreign countries not to meddle in Hong Kong
BACK IN JAIL
Subrata Roy, the jailed chief of India's Sahara conglomerate, is back in a cell after living in a makeshift prison office for two months as he tried to negotiate the sale of his luxury hotels, a jail official said. Full Article
Appointment of Arvind Subramanian as chief economic adviser hits Modi hurdle. Full Article
Diageo bars United Breweries from appointing independent director at United Spirits. Full Article