Mumbai: The Indian rupee continued to trade near one-week lows in afternoon session on Tuesday weighed by losses in domestic shares after a much slower-than-expected rise in the August factory output.
At 2:30pm, the partially convertible rupee was at Rs44.74/75 per dollar, after dropping to Rs44.7650, its lowest since 5 October and below Monday’s close of Rs44.41/42. Last Thursday, it had hit a 25-month high of Rs44.1250.
India’s annual industrial output growth plummeted to single digit in August, mainly due to a contraction in capital goods and consumer non-durables, easing pressure on the central bank to again raise rates in November.
Shares extended losses to more than 1% on Tuesday, as August industrial output rose at a much slower-than-expected 5.6% from a year earlier, and on weak regional peers.
Hopes for foreign inflows remain upbeat with state-owned Coal India set to open an initial public offering in mid-October to raise up to $3 billion.
Other state firms planning follow-on share sales include Power Grid Corp and Steel Authority of India.
Foreign funds have bought shares worth a record $21.4 billion so far this year, out of which more than $8 billion has come in since the begining of September. The rupee is up 5.8% since September, and 4.6% thus far this year.
The index of the dollar against six majors was up 0.6%.
The euro fell to a one-week low versus a broadly firmer US dollar on Tuesday, as traders pared back speculative short positions in the US currency ahead of the release of latest FOMC minutes later in the day.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were at 44.87, Rs44.8650 and 44.8675, respectively, with the total traded volume on the three exchanges at about $5.1 billion.