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Rupee down on choppy stocks, firm dollar

Rupee down on choppy stocks, firm dollar
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First Published: Fri, Jan 08 2010. 06 05 PM IST
Updated: Fri, Jan 08 2010. 06 05 PM IST
Mumbai: The rupee pulled back from 15-month high on Friday as a stronger dollar and choppy equities raised concerns whether foreign investors would maintain the pace of portfolio investments this year.
The partially convertible rupee ended at 45.75/76 per dollar, about 0.2% below its close of 45.68/69 on Thursday when it rose during trade to 45.55, its strongest since 23 September 2008.
Foreign fund investments in local shares are a key driver for the rupee. In 2009, inflows of more than $17 billion helped the rupee surge 12.2% from a record low of 52.2. The unit gained 4.7% on the year.
The BSE benchmark Sensex dropped 0.4% on Friday, falling for a second session, as forecast for a strengthening rupee spooked export-focused outsourcers.
“There’s uncertainty whether the fall in stocks may be the beginning of a fresh round of correction,” said a trader with a private bank.
The dollar’s rise also hit sentiment for the rupee. The US currency rose ahead of an expected upbeat US payroll data, which would suggest more recovery for the world’s biggest economy.
However, a Reuters poll on currencies in Brazil, Russia, India and China on Thursday showed the rupee was expected to appreciate about 4% in 2010 to around 44 per dollar.
One-month offshore non-deliverable forward contracts was at 45.70/80, little changed from the onshore spot rate.
In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX ended at 45.8350 and 45.8375 respectively.
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First Published: Fri, Jan 08 2010. 06 05 PM IST
More Topics: Markets | India | Rupee | Currency | Foreign Exchange |