* Rupee little changed as exporters, banks sell dollars * Dollar demand from importers, foreign funds weighs (Updates to close) By Swati Bhat MUMBAI, Jan 21 (Reuters) - The Indian rupee rose in late trade on Wednesday as exporters sold the dollar to cash in on their holdings of the U.S. unit, but a weak domestic share market prevented a sharper rise. The partially convertible rupee closed at 49.11/13 per dollar, 0.2 percent stronger than Tuesday's close of 49.20/22. "There is still some good resistance at 49.25 and so there is some dollar selling interest at those levels. If the dollar further appreciates against the majors, then the rupee would depreciate and test 49.60-49.95 levels soon," said L. Subramanian, chief dealer at ICICI Bank. Other dealers said state-run banks sold dollars around 49.25, which helped the rupee rise in late trade. Indian shares .BSESN fell 3.5 percent on Wednesday to their lowest close in seven weeks as investors cut positions ahead of key earnings and on rising risk aversion among foreigners.[.BO]. Foreign fund flows have been a key factor determining the rupee's fortunes in recent years. Foreigners have already sold about $660 million worth of local shares in 2009, after having dumped more than $13 billion last year. The rupee is down 0.8 percent this month, after having fallen 19.1 percent in 2008. The dollar's rise against other major currencies overseas also weighed on sentiment for the rupee. Sterling tumbled on Wednesday, hitting a 7-1/2-year low against the dollar, as intensified risk aversion drove investors back into the U.S. currency which reached its strongest levels against the euro in six weeks. See [USD/]. One-month offshore non-deliverable forward contracts PNDF were at 49.32/42, suggesting a weak outlook for the local unit. (Editing by Mark Williams)

Source