India Forex Exchange - Rupee subdued by weak shares, Regional Forex
Written by admin on February 8th, 2010 in India Forex Exchange.
India Monday 8 February 2010: The rupee held steady on Monday in the absence of clear direction from regional markets and as weak shares subdued sentiment on concerns that foreign investors would repatriate their funds.
At 9:45 a.m. (0415 GMT), the partially convertible rupee was at 46.72/73 per dollar, after dropping to 46.76 early. It closed at 46.73/74 on Friday after hitting 46.7650, its lowest since Dec. 30.
“The rupee is likely to be choppy today awaiting fresh cues. It is currently tracking the dollar index and weak equity market,” said Ashtosh Raina, head of foreign exchange trading, at HDFC Bank in Mumbai.
The euro and growth-linked currencies were on slippery ground on Monday as mounting fiscal worries in the euro zone and lingering concerns about a global tax on banks kept risk appetite modest.
Asian currencies were mixed against the dollar.
Indian shares fell 0.5 percent early on Monday, led by losses in Infosys Technologies and Reliance Industries, with sentiment also affected by worries in the euro zone.
Foreign buying of local shares is a key factor determining the rupee’s direction.
Foreigners have sold a net $1.8 billion worth of shares in the last 17 trading sessions. However, the rupee has been supported by $2 billion of net inflows into debt so far this year.
One-month offshore non-deliverable forward contracts were trading at 46.76/86, marginally below the onshore spot rate.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both quoting at 46.7525, with the total traded volume on the two exchanges at about $330 million.