Oil, stocks knock rupee towards 15-mth low

By Saikat Chatterjee

MUMBAI (Reuters) - The rupee fell back towards 15-month lows on Thursday as a stock market sell-off and record oil prices weighed, but traders said it found support as state banks sold an estimated $600 million to $700 million.

The partially convertible rupee ended at 43.30/31 per dollar on Thursday, 0.3 percent weaker than Wednesday's close of 43.17/18. It hit a 15-month low of 43.50 on Tuesday.

The rupee has fallen 1 percent so far this week, taking its losses against the dollar to more than 9 percent so far in 2008. It gained more than 12 percent last year.

"There was some dollar buying in the offshore markets and with the outflows continuing in the stock market, the next resistance for the dollar/rupee is 43.45 and if that breaks, then it may head to 44," said Rohan Lasrado, a currency dealer at HDFC Bank.

One-month offshore non-deliverables forwards contracts were at 43.75/85, weaker than the onshore rate.

Indian shares fell 4.2 percent on Thursday, taking their losses to 15 percent in two weeks, as record oil prices above $145 a barrel intensified inflation expectations and possibly tighter monetary policy.

Foreigners have sold $6.6 billion worth of stocks so far this year after buying a net $17.4 billion last year.

Foreign portfolio outflows from the battered stock market, a widening trade gap and an unrelenting rise in the price of oil are likely to drive the weakening Indian rupee down nearly 2 percent in coming months, a Reuters poll said.