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Rupee weakens tracking Asian peers

Rupee weakens tracking Asian peers
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First Published: Mon, Nov 15 2010. 11 35 AM IST
Updated: Mon, Nov 15 2010. 11 35 AM IST
Mumbai: The rupee fell on Monday, tracking weak Asian units and the dollar’s overseas gains against majors, with concerns of likely capital outflows as the year-end approaches also weighing on the sentiment.
Foreign funds are looking to wind up their investments ahead of the year-end as they prepare to close their accounts.
At 10.43 am, the partially convertible rupee was at 45.02/45.03 per dollar, after touching 45.11, its weakest since 28 September and down from its previous close of 44.80/81.
Dealers expect the rupee to move in 44.90-45.20 band intra-day.
“There is an anticipation of dollar outflows, which is pulling Asian stocks down. Also, the dollar’s strength is coming back,” said a dealer at a foreign bank.
Foreign funds have bought shares worth a record $28.5 billion so far in 2010, compared with last year’s $17.5 billion, which has helped the rupee gain 3.3% year-to-date.
But, foreign fund inflows into equity have tapered off to $25.03 million as on 12 November compared with a robust $1.56 billion as on 8 November, data published by the stock market regulator Securities and Exchange Board of India (Sebi) showed.
“Exporters are mostly hedged. Market positioning is mostly long (dollars),” another foreign bank dealer said, expecting the rupee to remain weak in the short term.
The euro edged higher on Monday, with some hoping for a rescue package for Ireland, but sentiment was fragile with the market watching other euro zone economies and nervous about a prospective tightening in China.
The dollar index against six majors was up 0.15% at 78.203 points. Asian currencies were weak.
Indian shares were down 0.13% in choppy early trade, tracking Asian equities.
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First Published: Mon, Nov 15 2010. 11 35 AM IST
More Topics: Rupee | Dollar | Currency | Markets | India |