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Rupee dips, dealers search for flow cues

Rupee dips, dealers search for flow cues
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First Published: Tue, Nov 13 2007. 02 51 PM IST
Updated: Tue, Nov 13 2007. 02 51 PM IST
Mumbai:Rupee eased a touch on Tuesday, with investors watching the stock market for cues on capital inflows and to guage risk appetite among foreigners for emerging market assets, dealers said.
At 1 pm, the rupee is at 39.39/40 per dollar, slightly weaker than Monday’s close of 39.36/37. It hit a near- decade high of 39.16 last week.
At 9:40 am, the partially convertible rupee was at 39.39/40 per dollar, slightly weaker than Monday’s close of 39.36/37. It hit a near decade high of 39.16 last week.
“There’s no clear direction at the moment, and the market does not want to take any huge positions,” said the chief dealer with a foreign bank, who expects the rupee to trade in a 39.30-39.42 range on Tuesday.
India’s main stock index fell for a sixth straight session on Monday, its longest losing streak in nearly five years, weighed down by weak markets and US subprime worries.
Foreign funds have sold $367 million of local shares in November, trimming their net buys to around $17 billion in 2007.
Overseas investments into local equities have been a key driver of the rupee, that has gained more than 12% this year.
Asian stocks edged up on Tuesday, steadying from their biggest one-day percentage drop in three months, but a strong yen weighed on some Japanese exporters, keeping the Nikkei under pressure.
Concerns about credit-related losses at US banks spurred a retreat in Asian currencies, with investors trimming riskier bets, which weighed on the rupee.
But losses are expected to be limited as exporters are seen selling dollars around 39.40.
“Everytime the rupee weakens to that mark, there seems to be an avalanche of dollar selling, which has been a huge resistance against the rupee weakening,” said the chief dealer.
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First Published: Tue, Nov 13 2007. 02 51 PM IST
More Topics: Rupee | Dollar | Currency | Market | Sensex |