Rupee falls for second day; local shares, euro drag
MUMBAI (Reuters) - The rupee fell for a second session on Thursday, dragged by a late slide in the domestic stock market and a fall in the euro, with a crucial inflation number on Friday to give cues ahead of the central bank's rate setting meeting next week.
Shares fell for a fifth day as dealers booked profits in a market which has outperformed its regional peers in 2012 and seen capital inflows of over $20 billion.
The rupee has been supported in recent sessions by inflows on shares sales by state-run miner NMDC Ltd (NMDC.NS) and Bharti Infratel (BHRI.NS).
About 30 percent of NMDC's $1.1 billion share sale was picked up by foreign investors, sources told Reuters.
Bharti's up to $830 million initial public offering was fully covered by Thursday, a day ahead of issue close.
The rupee's losses were also caused by a rebound in the global dollar on Thursday as investors looked past an expected Fed outcome and booked profits on short dollar positions.
"The recovery in the global dollar and a fall in stocks just turned the tide against the rupee," said Hemal Doshi, currency strategist at Geojit Comtrade.
"Unless the USD/INR closes below 54.25, it will stay in a 54.25-54.80 range."
The partially convertible rupee closed at 54.46/47 per dollar, weaker than its Wednesday's close of 54.32/33.
Investors are now looking forward to the inflation data on Friday, with a Reuters poll showing a 7.60 percent rise in October.
India's central bank is likely to hold rates steady on December 18, but views on a cash reserve ratio cut were split, a Reuters poll conducted before the data release showed.
Credit Agricole, however, expects the rupee to gain next year with a December-end target of 52 to the dollar.
"The INR is trading at relatively attractive levels in REER terms, and seems to have priced in many of the fundamental problems it faces," the brokerage said in a note, referring to the real effective exchange rate (REER).
In the offshore non-deliverable forwards, the one-month contract was at 54.78, while the three-month was at 55.31.
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 54.6450, with total traded volume of $5.2 billion.
(Editing by Anand Basu)
- Tweet this
- Share this
- Digg this
- Wall St. finally turning on Amazon as Bezos magic fades
- Wall Street finally turning on Amazon as Bezos magic fades
- WHO vaccines boss signs up as Ebola trial guinea pig
- Two dead, four wounded after student opens fire at Washington state school
- UPDATE 10-Two U.S. states to quarantine health workers returning from Ebola zones
The latest Reuters poll of 20 economists taken over the past week shows Asia's third-largest economy will likely grow 5.5 percent this fiscal year and 6.4 percent the next, slightly better than 5.3 percent and 6.3 percent expected in the July poll. Full Article
Euro zone risks "relapse into recession" without structural reforms - Draghi. Full Article
Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw” Full Article