The Indian rupee commenced slightly lower on Friday, 25 November 2011 tracking the US dollar that remained on the upside although in subdued trades early today, coupled with bleak local shares. The domestic currency opened lower by 14 paise at Rs. 52.22 per dollar dipped to a low of 52.23, but edged back to a high of 52.06 so far during the day. The domestic equities started in the negative, edged up gradually thereafter but fell back into the red, not providing a definite direction for rupee. Meanwhile, the central bank's intervention to check any big slide in the rupee may help temper selling. In the spot currency market, the Indian unit was last seen trading at 52.10, down around 2 paise or 0.04% as compared to previous close at 52.08.
The euro dipped to a fresh seven-week low against the dollar on Friday, being partly pressurized after Fitch lowered Portugal's credit rating to junk status on Thursday. Apart from Portugal's downgrade at the hands of Fitch, sentiments were also impacted after German Chancellor Merkel dashed hopes of introducing joint Euro bonds while she also opposed enhancement of the role of ECB as the lender of last resort. All these in turn continued to pressurize bond yields to move higher. The single common currency registered a low of 1.3302 and is currently quoting at around 1.3310 versus the greenback.
The US Dollar Index, which measures the performance of the U.S. unit against a basket of six currencies, is up 17%, at around 79.28 levels. The DXY index moved to its highest reading since October 6th, being supported by continued pessimism surrounding the Euro zone. Among Asian currencies, the Taiwan dollar is down 0.20% at 30.49, the South Korean won lost 0.30% at 1162.30 while the Indonesian Rupiah fell 1.56% at 9132.50 as against the US dollar.
Domestic equities are seen oscillating on both sides of the red line since early hours. Key benchmark indices opened lower on weak Asian stocks. Data showing heavy selling by foreign funds recently hit investor sentiment adversely. The market breadth was negative. Asia markets dropped on Friday, 25 November 2011, as lingering concerns over Europe's debt crisis kept investors sidelined.
FIIs sold shares worth a massive Rs. 1636.08 crore in a single trading session on Thursday, 24 November 2011, as per the provisional data from the stock exchanges. At the time of writing, India's key benchmark BSE Sensex is down near 35 points at around 15823 while S&P CNX Nifty is lower by almost 12 points at around 4744.
In the domestic currency futures market on the NSE, the front month November 28, 2011 contract, opened on Friday at 52.30, higher than spot market rupee. The contract hit an intraday high at 52.30 and registered a low at around 52.09 so far during the day. At the time of writing, the NSE as well as MCX November 2011 USD/INR contract was trading at around 52.12, lower by around 2 paise or 0.04% as compared to previous close at 52.14.
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