Indian rupee falls most in over a month; continued stock weakness hurts
* Rupee ends at 53.50/51 vs Thursday's close of 53.22/23
* Shares fall for seventh session, longest loss since Nov. 2011
* Rupee snaps four weeks of gains, down 0.52 pct this week
By Subhadip Sircar
MUMBAI, Feb 8 (Reuters) - The Indian rupee fell the most in over a month on Friday, extending its losses for a third session, as continued weakness in local shares and prospects of a worse-than-expected slowdown in the economy weighed down the currency.
Local stocks declined for a seventh successive session, its longest losing streak in over a year, raising concerns about the future of continued fund flows into now expensive equities.
So far in 2013, the rupee has been the second best performer in Asia driven mainly by foreign fund inflows into Indian stocks which have already crossed $6 billion.
Most recently, the Indian government netted $2.15 billion by selling shares in NTPC with more than half the bids coming from foreign investors.
But, the country's economic growth remains a concern after a government projection estimated economic growth in the fiscal year will be worse than expected.
The government said the country's slowest growth in a decade could be much worse than earlier projections. Preliminary data released on Thursday showed the economy set to have grown 5.0 percent in the fiscal year ending next month, underscoring the urgent need for reforms to boost growth.
The euro's weakness also hurt the rupee. The common currency hovered near a two-week low on Friday after the European Central Bank chief hinted at concern about the impact of the currency's recent strength on the economy, in remarks that analysts said went further than they had expected.
"The global dollar strength and stock weakness is hurting the rupee. I do not see any fresh inflows till the budget. That will keep the rupee in a 52.75-53.90 range," said Sudarshan Bhat, chief forex dealer at Corporation Bank.
The partially convertible rupee closed at 53.50/51 per dollar, versus its previous close of 53.22/23, down 0.52 percent, and its biggest daily percentage fall since Jan 4.
It earlier fell to 53.6525 in the session, its lowest level since Jan. 29. It was also the rupee's first weekly fall after four weeks of gains.
The rupee will strengthen about 1 percent to 52.50 in the next 12 months, a Reuters poll showed.
In the offshore non-deliverable forwards, the one-month contract was at 53.81, while the three-month was at 54.39.
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 about 53.74 with a total traded volume of $4.9 billion. (Editing by Anand Basu)
- Tweet this
- Share this
- Digg this
- Scots spurn independence but impatient for new powers
- UPDATE 1-Microsoft lays off 2,100, axes Silicon Valley research
- Eight bodies found after attack on Guinea Ebola education team
- Obama nominates Indian-American as ambassador to India
- China not warlike, says Xi, as border standoff dominates India trip
Scotland has chosen to stay in the United Kingdom, spurning independence in a historic referendum that had worried allies and investors, results showed on Friday with more than two thirds of the vote declared. Full Article
Obama to nominate Indian-American Richard Verma as India ambassador - congressional source. Full Article