Indian rupee trims losses after communists withdraw

(Updates to afternoon)

MUMBAI, July 8 (Reuters) - The Indian rupee trimmed losses on Tuesday after the communist allies withdrew their support for the ruling coalition, as the move was not seen as a threat to the government.

"The market had factored in the left withdrawal and even the stock markets took it in their stride, so dealers had already positioned themselves," said a senior dealer with a private bank.

At 3:10 p.m. (0940 GMT), the partially convertible rupee <INR=IN> was at 43.3250/3300 per dollar, weaker than Monday's close of 43.295/305 but stronger than 43.4225 in the morning. It had hit a 15-month low of 43.50 last week.

The communist parties that have provided India's government with a parliamentary majority for four years said on Tuesday they were withdrawing their support to protest a civilian nuclear energy deal with the United States.

The left's exit is expected to lead to a parliamentary vote of confidence in the government, which hopes the newly enlisted support of the regional Samajwadi Party will enable it to win such a ballot and avoid calling early general elections.

For stories see [ID:nISL264121] and [ID:nISL56693].

Dealers said the central bank was also seen selling dollars in the market through state-run banks at around 43.40, helping curb sharp losses in the local unit.

India's main share index was down 1.5 percent in the afternoon, after having fallen as much as 3.5 percent in early trade. See [.BO]. (Reporting by Swati Bhat; Editing by Ranjit Gangadharan)