Rupee drops as euro, shares fall

Rupee drops as euro, shares fall

Mumbai: The rupee eased on Tuesday, tailing the euro’s drop against the US dollar and lower shares, after initially rising to its highest in nearly two months.

The partially convertible rupee ended at Rs47.73/74 per dollar, and 0.2% weaker than its previous close of Rs47.635/645. In early trade, it climbed to Rs47.43, its highest since 12 June.

“The rupee’s gains were gone once the euro weakened and domestic stocks fell," a senior dealer with a foreign bank said.

The yen and the dollar gained on Tuesday as falls in equity and oil prices encouraged investors to take profits and a jump in risk appetite on increased confidence of a recovery in the global economy.

The euro was down against the US unit, though still not far from a nine-month high of $1.4445 hit on Monday.

“Tomorrow’s trade would again be a reflection whether the euro manages to recover," the trader with the foreign bank said.

Choppy shares also hit sentiment. The Bombay Stock Exchange index shed 0.6%, snapping a three-day rise, as investors locked in profits after it had jumped 17.5% over the last three weeks.

One-month offshore non-deliverable forward contracts were quoting at 47.75/85, little changed than the onshore rate.