Rupee extends fall as shares slide 1%

Rupee extends fall as shares slide 1%

Mumbai: The Indian rupee further extended losses in afternoon session on Tuesday, in line with the domestic sharemarket, while a pause in the dollar’s slide versus major units also hurt.

At 1:50pm, the partially convertible rupee was at Rs47.15/16 per dollar, below its previous close of Rs46.96/97 on Friday. Financial markets were closed on Monday for a holiday.

Shares fell 1% in afternoon trade after seesawing earlier in the day.

Portfolio flows into local shares are a key driver of the rupee. Foreigners have bought more than $14 billion of local equities so far this year, after being sellers of more than $13 billion in 2008.

The dollar index, a gauge of the US unit’s performance versus six majors, was marginally lower, after haivng been down 0.2% at the start of the Indian trading session.

One-month offshore non-deliverable forward contracts were quoting at Rs47.18/28, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were both quoting at Rs47.2350 each, with the total traded volume on the two exchanges at about $1.8 billion.