RTTN:Indian Rupee Reverses Yesterday's Uptrend Against US Dollar
(RTTNews) - Erasing much of yesterday's fresh multi-week highs, the Indian rupee reached a 5-day low of 49.3175 against the US dollar on Tuesday as domestic equities fell sharply on fresh concerns about the feasibility of a much-heralded plan to stem Europe's debt woes.
Traders also flee from risk-associated assets after the U.S. futures broker MF Global Holdings, run by former New Jersey governor and Goldman Sachs Group co-chairman Jon Corzine, filed for bankruptcy following bad bets on euro zone debt.
Besides, Greek Prime Minister George Papandreou called an "adventurist referendum " on the EU bailout, risking a new euro zone crisis and China's manufacturing activity eased to its weakest level in almost three years in October also generated negative sentiment.
The benchmark 30-share Sensex moved in the range of 17,662-17,422 before ending down 224 points or 1.27 percent at 17,481. The broader Nifty index fell 69 points or 1.29 percent to 5,258, while the BSE mid-cap and small-cap indexes ended down 0.72 percent and 0.55 percent, respectively.
Data released today showed that India's manufacturing sector rebounded for the first time in six months in October after virtually stalling in September. The HSBC Markit India Manufacturing PMI rose to 52.0 from 50.4 in September, comfortably above the 50 mark which divides growth and contraction, boosted by rising domestic orders for new business.
After having traded below the 49.0 area yesterday for the first time since September 21, the Indian rupee retreated back below the 49.0 level versus the US dollar on Tuesday. The rupee slipped as low as 49.3175 against the greenback, a 5-day low, before stabilizing around the 49.30 level. The USD/INR thus broke past the 10-day simple moving average level and the next barrier could be at 49.50.
