Rupee drops on high crude, weak stocks

Rupee drops on high crude, weak stocks
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First Published: Fri, Jun 27 2008. 11 25 AM IST
Updated: Fri, Jun 27 2008. 11 25 AM IST
Mumbai: The rupee weakened on 27 June after global oil prices climbed to a record in the previous session, and a more than 3% fall in the local stock market raised worries of capital outflows.
At 10:10 a.m. the partially convertible rupee was at 42.83/84 per dollar, off an early low of 42.89, but 0.4% weaker than its previous close of 42.675/685.
U. Venkataraman, chief dealer at IDBI Bank, said high oil prices and heavy losses across stock markets were putting pressure on the rupee.
Oil was trading above $139 a barrel on 27 June, after hitting a record above $140 in the previous session. India imports more than two-thirds of its oil.
India’s main share index dropped more than 3.5% early, taking its fall this year to more than 31%.
Foreign funds have sold a net $6.2 billion of Indian shares so far in 2008, more than a third of what they pumped in last year.
Dealers were also awaiting weekly inflation data due by noon (0630 GMT). The annual inflation is expected at 11.18% in mid-June, the highest in 13 years.
”The past 10 days price action suggests there will be a strong resistance at 43. Exporters and state-banks will sell at around that level, so the rupee should be in a 42.80-42.95 range,” Venkataraman said.
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First Published: Fri, Jun 27 2008. 11 25 AM IST
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