India rupee falls to 1-month low on share losses, oil demand

Mon Jan 7, 2013 5:15pm IST

Related Topics

* Rupee ends at 55.23/24 per dlr vs 55.07/08 Fri close

* Credit Suisse says hard to be 'structurally' optimistic about rupee

* Shares give up early gains, end down 0.47 pct

By Subhadip Sircar

MUMBAI, Jan 7 (Reuters) - The Indian rupee fell to an over one-month low on Monday, extending its losing streak to a third session, dragged down by steady dollar demand from oil refiners and a fall in local stocks.

The recent bout of weakness in the rupee comes after data released last week showed the country's current account deficit widened to a record high in the September quarter and after Federal Reserve minutes last week were seen as casting doubt over future U.S. monetary stimulus.

Credit Suisse, despite calling India's economy in a "cyclical sweet spot", said it was hard to be 'structurally' optimistic about the rupee, given the large inflows required to produce a balance of payments surplus.

"The pressure on the rupee is from dilution in bearish undertone on the USD post Fed's halt to QE4 and fundamentals of the rupee with CAD (current account deficit) at over 5 percent being weak," said Moses Harding, head of asset-liability management at IndusInd Bank.

"Over all, the near-term outlook is for consolidation at 54-56 with bias into higher end."

The partially convertible rupee closed at 55.23/24 per dollar, weaker than its Friday close of 55.07/08. It had fallen to 55.32 during the session, its lowest since Nov. 29.

Traders described solid greenback demand from oil companies during the session, which pressured the rupee. Indian stocks also snapped a four-day winning streak to fall for the first time in 2013, ending down 0.47 percent.

Still, foreign fund flows have continued to remain strong in India with $725 million of inflows in the week ended Jan. 4, the highest among the Asia equity markets tracked by Nomura.

In the offshore non-deliverable forwards, the one-month contract was at 55.57 while the three-month was at 56.14.

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 55.4750 with a total traded volume of $4.95 billion. (Editing by Subhranshu Sahu)

FILED UNDER:
  • Most Popular
  • Most Shared

Insight

REUTERS SHOWCASE

Border Talks

Border Talks

India names Ajit Doval as special envoy for China border talks.  Full Article 

WTO Deal

WTO Deal

U.S. seeks to step up India trade talks  Full Article 

Phone Masts

Phone Masts

American Tower to buy Bharti Nigeria phone masts for $1.1 billion  Full Article 

Infrastructure Plan

Infrastructure Plan

India targets private cash to build railways to its ports.  Full Article 

Shadow Banking

Shadow Banking

Reserve Bank planning more measures for NBFCs.  Full Article 

Auto Sector

Auto Sector

Hyundai Motor, Kia Motors lift 2014 global sales target on China, emerging markets  Full Article 

Oil Prices

Oil Prices

Some fund managers see oil falling to $60 without OPEC cut.  Full Article 

Project Shelved

Project Shelved

Jindal Steel shelves $10 bln project after coal setback.  Full Article 

Market Eye

Market Eye

Sensex, Nifty rise to record after China, ECB stimulus boosts risk appetite.  Full Article 

Reuters India Mobile

Reuters India Mobile

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