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Tuesday November 3, 08:12 PM
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Rupee eases on weaker equities, exports
By Anurag Joshi
MUMBAI (Reuters) - The rupee slipped on Tuesday as local shares fell for the sixth straight day and weaker September exports raised concerns that dollar inflows could slow down if such a trend persists.
The partially convertible rupee ended at 47.40/41 per dollar, off an intraday low of 47.50 and about 0.9 percent below its previous close of 46.96/97 on Friday. Financial markets were closed on Monday for a holiday.
"Foreign banks were buying dollars on behalf of overseas funds. Besides, a fall in exports also added to the bearish sentiment for the rupee," said a senior trader with a foreign bank.
The BSE Sensex (^BSESN : 16632.01 -222.92
) ended 3.1 percent lower on Tuesday. Foreign portfolio inflows of about $14.2 billion so far in 2009 has been a key support for the local currency, but recent weakness in the equity market has raised worries about their sustainability.
India's exports in September fell 13.8 percent year-on-year to $13.6 billion, a government official told Reuters on Tuesday. Trade deficit, however, shrunk to $7.77 billion in the month, and imports fell 31.3 percent on year to $21.38 billion.
Traders said a stronger dollar in overseas markets also pressured the rupee. The dollar hit a one-month high against a basket of currencies on Tuesday as investors retreated from risk assets on renewed jitters over banks.
One-month offshore non-deliverable forward contracts were quoting at 47.46/56, weaker than the onshore spot rate.
In currency futures, the most traded near-month contracts on the National Stock Exchange (^NSEI : 4941.75 -63.8) and MCX-SX was at 47.4875 and 47.48 respectively, compared with 47.07 and 47.06 last Friday.
(Editing by Malini Menon)
(For more news on Reuters Money visit http://www.reutersmoney.in)
