Rupee down 23 paise vs dollar, weak equities

Falling for the first time in three days, the rupee today lost 23 paise to end at 54.09 due to month-end dollar demand and a steep fall in local equities.

The local currency commenced lower at 54.03 a dollar yesterday's close of 53.86 at the Interbank Foreign Exchange (Forex) market.

Later, it moved in a tight range of 54.00-54.22 before ending at 54.09, a fall of 23 paise, or 0.43 per cent. In the last two sessions, it had gained 87 paise, or 1.60 per cent.

Forex dealers said, however, some capital inflows and weak dollar overseas cushioned rupee's fall to some extent.

"The rupee today completely followed the local equity markets' trend. Fears over the Italian election results which might hit the euro-zone crisis also affected the trading sentiment here," said Ashtosh Raina, chief dealer at HDFC Bank.

He added that forex market is expecting some positives on containing the fiscal deficit and borrowing side, which might boost the rupee sentiment. "Rupee will move in the 53-55 range this week," Raina said.

The BSE benchmark Sensex today nose-dived by 317 points, or 1.64 per cent, to 19,015.14 due to hike of up to five per cent in freight charges by Railway Minister Pawan Kumar Bansal in Rail Budget.

Foreign institutional investors bought local equities worth nearly USD 14 million (Rs 74.68 crore), according to the BSE provisional data.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "Rupee ended the day on a weaker note. The rupee lacked clarity from most parts of the day today, hovering in a band 22 paise. No clear cues were seen ahead of the crucial Budget to be unveiled on February 28."

"The rupee was under pressure today... the Rail Budget disappointed the markets as the government proposed a hike of 5 pct in the freight rate. This pressurised the Indian stock markets and the rupee," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

... contd.

ALSO READ

Punjab National Bank Q4 net profit plunges 21%, bad loans hit hard

Goldman Sachs downgrades Apollo Tyres ahead of earnings

Trade War: EU to impose punitive import duties on China solar panels

Royal Caribbean's Mariner of Seas to call on Goa, Kochi