Rupee falls for second day; local shares, euro drag

MUMBAI Thu Dec 13, 2012 5:34pm IST

An employee counts rupee notes at a cash counter inside a bank in Kolkata June 18, 2012. REUTERS/Rupak De Chowdhuri/Files

An employee counts rupee notes at a cash counter inside a bank in Kolkata June 18, 2012.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

Stocks

   

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)

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

Sino-Indian Ties

REUTERS SHOWCASE

Eyeing Stocks

Eyeing Stocks

Interview - EPFO chief urges green light to buy stocks  Full Article 

Stimulus Reports

Stimulus Reports

China cenbank injects $81 bln into major banks to support economy - reports  Full Article 

Ranbaxy Investigation

Ranbaxy Investigation

Ranbaxy says U.S. authorities seek information on pricing data.  Full Article 

Monsoon Update

Monsoon Update

Delayed retreat of monsoon rains to start this weekend  Full Article 

Financing Deal

Financing Deal

IndiGo agrees $2.6 billion aircraft finance deal with China's ICBC  Full Article 

Fed Policy Meeting

Fed Policy Meeting

Fed could hint on rate-hike plans as it prepares for policy turn  Full Article 

Grim Outlook

Grim Outlook

Sony deepens loss estimate on struggling smartphone business  Full Article 

Sugar Surplus

Sugar Surplus

India to produce surplus sugar for fifth straight year - industry body  Full Article 

Business Sentiment

Business Sentiment

China, Singapore slowdown weigh on Q3 Asia business sentiment   Full Article 

Reuters India Mobile

Reuters India Mobile

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