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

Rupee loses 0.3% as falling stock markets damp risk appetite

Rupee loses 0.3% as falling stock markets damp risk appetite
Comment E-mail Print Share
First Published: Fri, Aug 07 2009. 09 03 PM IST

Outflow effect: The rupee slid after overseas investors on 5 August sold more Indian shares than they bought for the first time in 18 days. Rajkumar / Mint
Outflow effect: The rupee slid after overseas investors on 5 August sold more Indian shares than they bought for the first time in 18 days. Rajkumar / Mint
Updated: Fri, Aug 07 2009. 09 03 PM IST
Mumbai: The rupee had its biggest two-day loss in almost a month on speculation foreigners will cut their holdings of assets in India as slides in global stocks deter investment in emerging markets.
The rupee, which this week reached its highest level in almost two months, slid after overseas investors on 5 August sold more Indian shares than they bought for the first time in 18 days.
Outflow effect: The rupee slid after overseas investors on 5 August sold more Indian shares than they bought for the first time in 18 days. Rajkumar / Mint
Inflows helped drive the Bombay Stock Exchange’s Sensex index to a 14-month high this week, before it retreated on Thursday and Friday. The S&P 500 Index of US shares on Thursday slid 0.6%.
“Confidence in equity markets seems to be subdued and that is having an impact on the rupee,” said Ritwij Mahanta, a trader at IndusInd Bank Ltd in Mumbai. “The undertone is turning bearish for the rupee.”
The rupee fell 0.3% to 47.845 a dollar at close, according to data compiled by Bloomberg. It reached 47.41 on 4 August, the strongest since 12 June. Trading volumes were likely down by at least 50% from normal levels because of a strike by bank workers, Mahanta said.
Around 26 state-run banks, 10 private banks and some workers at eight foreign banks participated in a two-day strike that ends on Friday, C.H. Venkatachalam, convener of the United Forum of Bank Unions, said on Thursday from Chennai. Bank managers and trade unions representing employees are in talks, finance minister Pranab Mukherjee said in Parliament on Friday.
Offshore forwards contracts indicate the rupee will trade at 47.93 in a month, compared with expectations for 47.76 on Thursday. In forwards, assets are bought and sold at current prices for future delivery. Non- deliverable contracts are used for currencies not freely convertible and settled in dollars.
Kartik Goyal in New Delhi contributed to this story.
Comment E-mail Print Share
First Published: Fri, Aug 07 2009. 09 03 PM IST
More Topics: Markets | India | Rupee | Dollar | Currency |