Rupee falls as global risk aversion rises
MUMBAI (Reuters) - The rupee fell to its weakest in a month against the dollar, tracking lower emerging market assets after the downing of a Malaysian airlines jet at the Ukraine-Russia border sent investors scurrying to defensive assets.
The rupee fell 0.7 percent for the week, posting its biggest weekly loss since mid-June when emerging markets had reeled on worries about the prospect of civil war in Iraq.
Global factors are likely to be the key drivers for the rupee next week, given the prospect of tensions between Russia and the West over the downed Malaysian commercial jet.
That could offset signs of improving economic fundamentals at home. Data on Monday showed consumer prices eased to their lowest since figures were first published in January 2012, while other data this month showed improving manufacturing activity and rising exports.
"The improving momentum in the manufacturing sector should be supportive of stronger earnings in the corporate sector and equity portfolio flows by implication," Sanjay Mathur, an economist at RBS said in a note to clients.
"At the same time, the strength of exports should allay concerns about INR overvaluation."
The partially convertible rupee ended at 60.28/29 per dollar, from its Thursday close of 60.18/19.
The rupee fell as low as 60.46 to the dollar at one point, a level last seen on June 18. But the currency pared losses as Sensex rose for a fourth straight session on Friday after better-than-expected earnings from Tata Consultancy Services Ltd (TCS.NS) sparked a rally in IT stocks.
In the offshore non-deliverable forwards, the one-month contract was at 60.47/57, while the three-month was at 60.97/61.07.
(Editing by Anupama Dwivedi)
- Tweet this
- Share this
- Digg this
- Govt considers ban on e-cigarettes, sale of single smokes
- India's fiscal deficit in H1 almost 83 pct of full-year target
- Islamic State fighters kill 220 Iraqis from tribe that opposed them
- Sensex surges 500 points on BOJ easing, L&T gains
- Europe won't recognise vote in eastern Ukraine, Merkel tells Putin
Shares Hit Record
The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro. Full Article
China's shadow banking sector growing rapidly, third largest in world - FSB. Full Article