Mumbai: The rupee may ease as weak Asian stocks raise concerns that foreigners may pull out more of their portfolio holdings from the country.
Foreign funds have sold more than $3.9 billion shares so far this year, knocking the rupee down 7% since the beginning of January. In 2007, they had bought $17.4 billion and helped it to rise 12.3%.
The main share index fell 2.15% on Monday, its biggest single-day fall since early April, after a delay in an expected agreement to raise state-set fuel prices sparked market talk there was a rift within the ruling coalition.
The partially convertible rupee ended at 42.40/41 per dollar at the start of the week, a shade stronger than Friday’s close of 42.45/46. It hit a two-week high of 42.15 in intraday deals, a level it last traded on May 14, according to Reuters data.
Japan’s Nikkei average fell 1.5% on Tuesday, hurt by overnight losses on Wall Street and with exporters such as Honda Motor Co Ltd hit by a stronger yen.