Indian rupee eases on outflow worries, stocks eyed

MUMBAI, July 8 (Reuters) - The Indian rupee weakened on Tuesday as lower Asian stock markets raise prospects for more foreign fund outflows, but the central bank is expected to curb any sharp fall.

* At 9:06 a.m., the partially convertible rupee <INR=IN> was at 43.31/32 per dollar, a shade weaker than Monday's close of 43.295/305. It hit a 15-month low of 43.50 last week.

* Asian stocks were weighed down by the financial sector after sharp declines in shares of Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) on funding concerns reminded investors about the fragility of global credit markets. See [ID:nSP247453].

* Foreign funds have been net sellers of $6.7 billion worth of Indian shares this year, helping push the rupee down 9 percent so far in 2008. Last year, they had bought a record $17.4 billion of shares and pushed the rupee up more than 12 percent.

* Indian shares rose on Monday but there was little conviction for a recovery as the market shed most of the day's gains with investors bracing for an interest rate rise. [.BO]. (Reporting by Saikat Chatterjee; Editing by Prem Udayabhanu)