CO:India Rupee settles lower on weak domestic shares
MUMBAI (Commodity Online): The Indian rupee extends its losses in line with negative local shares on Friday, June 17, 2011 as well as due to dollar purchases by oil companies. Weak domestic shares also offset any rise in the domestic currency owing to slight reversal in euro losses.
The domestic currency opened up, by around 6 paise at Rs. 44.85 per dollar and hit an intra day high of 44.83 during initial trades. Thereafter, the local unit fell to a low of 44.96 during the day.
The Indian unit in the spot currency market ended at 44.89, up by mere 2 paise or 0.04% as compared to previous close at 44.91.
High volatility was witnessed in late trade as the key benchmark indices extended losses for the third straight day.
The barometer index BSE Sensex and the 50-unit S&P CNX Nifty hit their lowest level in more than three weeks as data showing sustained selling by foreign funds over the past few days hit sentiment. Foreign institutional investors (FIIs) sold shares worth a net Rs 599.52 crore on Thursday, 16 June 2011, as per provisional data from the stock exchanges.
As per provisional figures, the BSE Sensex was down 133.32 points or 0.74% to 17,852.56. The S&P CNX Nifty was down 34.05 points or 0.63% to 5,362.70.
Meanwhile, the Reserve Bank of India (RBI) yesterday raised its key lending rate viz. the repo rate by 25 basis points to 7.5%, as expected, after a mid-quarter monetary policy review, to tame inflation and said the monetary policy stance remains firmly anti-inflationary.
The euro found some reprieve on Friday after a rollercoaster ride in the past day that saw it slump to a record low on the Swiss franc before staging a small rebound on short-covering, though worries on how policymakers will tackle Greece's debt crisis remain. European leaders meet today to discuss the Greek debt crisis amid concern a default would risk spreading contagion to other countries in the region. Euro is currently quoting at 1.4268 against the dollar after having registered a low of 1.4126 early today. The US dollar index which tracks the US dollar against a basket of currencies is down 0.81% at 75.14.
In the domestic currency futures market, the front month June 2011 series on NSE commenced Friday at around Rs. 44.93 against the US dollar. The contract hit an intra day high at 45.04 and registered the day's low at 44.91 during the day and ended at 44.94, down by around 5 paise or 0.10% as compared to previous closing at 44.99.
