Wednesday, September 11, 2013

Rupee flat after rising to 62.92 per dollar; Sensex falls

The Indian rupee edged below 63 per dollar mark for the first time since August 19 on Thursday, but weakened after five straight days of gains. Stock markets also traded lower after a five-day rally saw the BSE Sensex gain over 10 per cent.

The partially convertible rupee traded flat at 63.41 per dollar as against Wednesday\'s close of 63.38 as of 10.15 a.m. The rupee had earlier hit a high of 62.92 against the greenback.

The Sensex traded down 140 points, while the Nifty declined 42 points to 5,870. Losses were led by banking stocks, which have seen sharp gains since the rupee recovered.

The Bank Nifty was down around 2 per cent, but traded above the psychological 10,000 levels. Recent gainers - IndusInd Bank, HDFC Bank and ICICI Bank - saw profit taking and were among the top Nifty losers.

The rupee has recovered 5.8 per cent over the last five sessions, its longest winning streak in a year, since Raghuram Rajan took over as the central bank chief on September 4 and unveiled a raft of steps including allowing banks to borrow more overseas and offering a concessional swap facility to banks to raise deposits from overseas Indians. (Read: Why Raghuram Rajan says analysts are like Indian cricket fans)

Avinnash Gorakssakar, head (research) at told NDTV that for now the scare that the rupee may hit 71-72 per dollar might not materialise.

\"August trade data has given hopes that exports are picking up. That will help in curtailing the current account deficit and will be positive for the rupee,\" he added.

Markets are now waiting for the Federal Open Market Committee meets next Tuesday and Wednesday. While the Fed is widely expected to begin scaling back its $85 billion monthly asset-buying programme, last week\'s disappointing jobs data prompted many to believe the reduction will be more modest than some had previously expected.

Local issues will also influence the rupee and stock markets today. The government is due to announce factory output and headline inflation data later today.

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