Rupee ends weak on importer dollar buy, FX inflows good

Bs_logoImage
Reuters MUMBAI
Last Updated : Jun 26 2014 | 6:38 PM IST

By Suvashree Dey Choudhury

MUMBAI (Reuters) - The rupee ended weak on Thursday, dragged down by month-end importer dollar demand and lower stocks, while uncertainty over Iraq turmoil kept traders cautious.

However, good dollar inflows prevented the unit from sliding sharply despite domestic stocks falling by nearly 1 percent.

Foreign funds have bought shares worth $2.3 billion and debt worth $2.90 billion so far in June, taking total inflows in the year to $9.9 billion and $10.5 billion, respectively.

"Foreign investors are expecting major reforms in the budget and so they are bullish in the long term," said Uday Bhatt, senior manager at UCO Bank in Mumbai.

Some residual dollar inflows related to Reliance Communications' share sale could have come in, dealers said.

Reliance Communications Ltd on Wednesday raised $804 million by selling shares in what is the single biggest equity issue since the pro-business Narendra Modi government took office.

The rupee ended at 60.14/60.15 to the dollar after trading in a narrow 60.08-60.20 band compared with Wednesday's close of 60.1250/1350.

Brent crude dropped under $114 a barrel on Thursday as most of Iraq's oil output remained unaffected by the militant insurgency in the country, although worries over the conflict kept a floor under prices.

However, Asian currencies were up with South Korean won leading the gains as a disappointing contraction in the U.S. economy during the first quarter raised expectations that the Federal Reserve may not hurry to increase interest rates.

The BSE Sensex ended lower, led by fall in oil explorers after the government deferred a decision to hike prices of locally produced gas, while the expiry of monthly derivatives contracts also weighed on sentiment.

In the offshore non-deliverable forwards, the one-month contract was at 60.40, while the three-month was at 60.98.

(Editing by Anand Basu)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Smart Quarterly

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

SAVE 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Jun 26 2014 | 6:29 PM IST