India rupee falls as traders cautious before Fed meeting; NMDC shares fully sold

Wed Dec 12, 2012 5:52pm IST

Related Topics

Coal Mining In The Punjab

Coal Mining In The Punjab

In Choa Saidan Shah miners dig coal with crude pick axes and load it onto donkeys to be transported to the surface earning a team of 4 workers around $10 to be split between them.  Slideshow 

* Rupee ends at 54.32/33 per dollar vs 54.26/27 on Tuesday

* NMDC's $1.1 billion share sale fully covered

* October factory output jumps 8.2 pct; rate cut hopes dim

By Subhadip Sircar

MUMBAI, Dec 12 (Reuters) - The Indian rupee fell slightly on Wednesday as caution prevailed ahead of the U.S. Federal Reserve's decision on whether to expand monetary stimulus, but a robust growth in factory output and inflows related to share sales supported the local currency.

The Federal Reserve is expected to announce a new round of bond purchases after its meeting later in the day, setting up the prospect of a round of dollar weakness that could propel emerging market currencies.

Investors are also looking ahead at November inflation date due on Friday, which will be the key ahead of a Reserve Bank of India's policy review on Dec. 18.

"We are likely to see some more government stake sales and M&A deals, which will support the rupee," said Satyajit Kanjilal, chief executive at Forexserve, an advisory firm for corporates.

"I expect the rupee to gain towards 53.50-53.60 levels towards the last week of December."

The partially convertible rupee closed at 54.32/33 per dollar, weaker than its close of 54.26/27 on Tuesday.

A sharp jump in the October industrial output data, led to some gains in the rupee, with some economists saying the slowdown in the economic growth may have bottomed out, although the volatile nature of the report makes it harder to draw strong conclusions.

The rupee was also supported by an up to $1.1 billion share auction in state-run miner NMDC Ltd, which was fully covered, and by inflows related to Bharti Infratel's initial public offering process.

Some outflows were cited by dealers on account of a stake sale by BT Group in Tech Mahindra worth about $186 million.

In the offshore non-deliverable forwards, the one-month contract was at 54.63, while the three-month was at 55.16.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.47, with total traded volume of $4.1 billion. (Editing by Anand Basu)

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

HCL Tech Results

HCL Tech Results

Q4 dollar revenue disappoints investors, shares fall  Full Article 

Fed Policy

Fed Policy

Fed presses forward with bond buying, cites uptick in inflation.  Full Article 

Q2 Profit Slips

Q2 Profit Slips

Samsung sees tough second half  Full Article 

Chinese Economy

Chinese Economy

China should set lower 2015 GDP growth target of 6.5-7 percent - IMF  Full Article 

Default Imminent

Default Imminent

Argentina fails to reach debt agreement   Full Article 

Economy Reboots

Economy Reboots

U.S. economy back on track with strong second-quarter rebound  Full Article 

Reuters India Mobile

Reuters India Mobile

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