Exporters help Indian rupee rise; oil, stocks drag

(Updates to close)

By Anurag Joshi

MUMBAI, May 9 (Reuters) - The Indian rupee rose on Friday as exporters cashed in their dollars after the unit hit one-year lows in the previous session, but traders said record high oil prices and a wobbly stock market kept the gains limited.

The partially convertible rupee <INR=IN> ended at 41.60/61 per dollar, off an intraday peak of 41.32, but 0.4 percent stronger than its previous close of 41.76/77. It lost 2.3 percent on the week.

"Exporters are supporting the rupee at every weak point. But, the rupee will depreciate further if oil prices don't stop rising," a state-run bank trader said.

Oil CLc1 surged to a record high above $125 a barrel on Friday. India imports 70 percent of its oil and crude refiners are among the biggest buyers of dollars in the local market.

India's trade deficit <INTRD=ECI> had widened 35.5 percent to $80.4 billion in the fiscal year ended March, largely due to soaring oil prices.

Traders said a shaky stock market that fell for a fifth day, extending losses to 4.9 percent this week, would keep the rupee under pressure.

Foreigners are net sellers of $2.8 billion of Indian stocks in 2008, after buying a record $17.4 billion in the previous year. (Editing by Ranjit Gangadharan)