Last Updated : 12 Dec 2008 10:59:17 AM IST
MUMBAI: The rupee weakened on Friday, falling from one-month highs as a sharply lower opening in the share market dented expectations that foreign funds would keep buying stocks as they have done so far in December.
At 10:15 a.m., the partially convertible rupee was at 48.89/91 per dollar, off a low of 49, but still 1.1 percent weaker than its previous close of 48.33/34, when it rose to a one-month high of 48.25.
"Most Asian stocks are in the red, so the rupee has weakened at open. Now the direction would depend on how our stocks perform and the flows that come in," said the chief dealer with a state-run bank.
"The unwinding of offshore non-deliverable forwards, which was happening in the past couple of sessions, has not been seen today," he added.
Foreigners have bought $482.9 million worth of shares in the four sessions to Wednesday, but are net sellers of $13.3 billion so far in 2008. They had bought a record $17.4 billion last year.
Asian stocks fell on Friday as the shrinking financial sector, the failure of a U.S. carmaker bailout plan and economic malaise doused the bargain hunting that had helped to drive up shares in the last week.
The BSE Sensex fell more than 3.5 percent in early deals, with investors also preparing for what is expected to be weak October industrial output data.
India's industrial output probably grew 2.2 percent in October from a year ago, sharply down from September, and analysts said slowing demand and deepening recessions in major economies threaten further slumps.
One-month offshore non-deliverable forward contracts were quoting at 49.10/49.25, weaker than the onshore spot rate after having been stronger or steady in the previous session, indicating a change in outlook.
