×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Heavy equity sales last month draw rupee down by 1.4%

Heavy equity sales last month draw rupee down by 1.4%
Comment E-mail Print Share
First Published: Tue, Sep 04 2007. 12 52 AM IST
Updated: Tue, Sep 04 2007. 12 52 AM IST
India’s rupee ended two days of gains after data released by the stock market regulator showed overseas investors made record sales of equities in August.
The currency extended its biggest loss in 15 months on concerns about foreign exchange outflows as investors take money out of local stocks.
Overseas funds sold stocks worth $2.03 billion (Rs8,323 crore) more than they bought in August, Securities and Exchange Board of India (Sebi) data revealed.
“Global investors’ confidence in emerging market assets hasn’t been restored fully,” said K. Raghunathan, chief currency trader at state-owned Union Bank of India in Mumbai. “The rupee will be under pressure as capital flows won’t be as consistent as they have been in past months.”
The rupee fell to 40.89 against the dollar on Monday in Mumbai, from 40.88 on 31 August, according to data compiled by Bloomberg. It dropped 1.4% in August—the biggest monthly decline since May 2006.
Global funds sold Indian equities in August as they pared riskier assets amid concern losses arising from the US subprime credit crisis would slow global growth. They made net sales worth $164.4 million on 30 August— the most in more than a week. The currency pared losses on speculation a rising local share index will spur overseas funds to return to equities.
The Bombay Stock Exchange’s Sensitive Index climbed to the highest in more than a month on Monday. The Sensex rose 0.7% to 15,422.05—the highest since 31 July.
“Some people have now started to expect overseas investors to return to the stock market, which has been doing rather well,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai.
“The rupee may gain more from capital inflows as economic growth remains strong,” he added.
Asia’s fourth largest economy expanded 9.3% in the three months to 30 June from a year earlier, after gaining 9.1% in the previous quarter. That beat the median 9% forecast in a Bloomberg survey of 18 economists.
India’s manufacturing growth accelerated in August, a key gauge showed on Monday.
Comment E-mail Print Share
First Published: Tue, Sep 04 2007. 12 52 AM IST
More Topics: heavy equity | Money Matters | Equities |