Indian rupee seen lower as oil hits new record

MUMBAI, May 21 (Reuters) - The Indian rupee head towards 13-month lows on Wednesday as record oil prices raise concerns of a widening trade deficit, and losses in Asian stock markets raise concerns about foreign demand for local stocks.

* The partially convertible rupee <INR=IN> ended at 42.635/640 per dollar on Tuesday, weaker than Friday's close of 42.53/54. Markets were closed on Monday for a holiday. It hit a low of 42.92 on Friday, its weakest since mid-April 2007.

* Asian stocks fell for a second consecutive day on Wednesday, feeding a rally in government bonds, as fears about consumer demand in the face of high oil prices rattled investors. See [ID:nSP108654].

* Oil CLc1, India's biggest import, has surged to record highs over $129 a barrel, raising the risk of the trade deficit widening. India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars. (Reporting by Saikat Chatterjee; Editing by John Mair)