Mumbai: The Indian rupee extended losses in afternoon trade on Monday weighed by losses in domestic shares and some dollar demand from oil refiners. The US unit’s gains versus majors also hurt sentiment, dealers said.
At 2:43pm, the partially convertible rupee was at Rs48.77/78 per dollar, weaker than its previous close of Rs48.48/49. It had risen 0.9% last week.
Moves in the stock market are a key factor influencing capital flows in and out of India. Foreigners have bought a net $8.7 billion worth of shares this year, helping the rupee climb back from record a low of 52.2 in early March.
Local shares were trading down 0.5% as investors locked in profits after a six-session rally, with weak Asian markets setting the direction.
The index of the dollar versus six majors was up 0.5%. The US unit gained against most currencies on Monday as global stocks fell and investors fretted over a growing trade spat between the United States and China.
Dealers said dollar demand from oil refiners was also adding to the pressure on the rupee. Oil is India’s biggest import with refiners being the largest buyers of dollars in the local currency market.
In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at Rs48.7875 and Rs48.7850 respectively, with the total traded volume on the two exchanges at about $1.2 billion.