India rupee falls for 2nd day; local shares, euro drag

Thu Dec 13, 2012 5:16pm IST

Related Topics

Stocks

   

* Rupee ends at 54.46/47 per dollar vs 54.32/33 on Wednesday

* Bharti Infratel IPO fully subscribed

* RBI likely to hold rates steady, view split on CRR-Reuters Poll

By Subhadip Sircar

MUMBAI, Dec 13 (Reuters) - The Indian 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 and Bharti Infratel.

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 Dec. 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

REUTERS SHOWCASE

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Microsoft Earnings

Microsoft Earnings

Microsoft sales beat Street hopes, cloud profits up.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

U.S. Economy

U.S. Economy

Spectre of no-inflation world looms over Fed's return to normal  Full Article 

Insider Trading

Insider Trading

Rengan Rajaratnam, SEC to settle civil insider trading charge.  Full Article 

Market Watch

Market Watch

Betting on the beaten up? Investors pin hopes on stocks in Europe, Japan.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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