Rupee reels as Sensex slips for 6th day

Nov 17 2012, 01:49 IST
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SummaryIndian equities fell for a sixth consecutive session on Friday even as the the rupee reeled to close at a two-month low of 55.17 to the dollar.

Indian equities fell for a sixth consecutive session on Friday even as the the rupee reeled to close at a two-month low of 55.17 to the dollar. Although foreign institutional investors have been net buyers of Indian equities in November so far, picking up some $710 million worth of stocks, the Sensex has given up 593 points or 3.1% in the last six days, including the Moorat session.

The rupee, meanwhile, has lost 3% in just two weeks with risk aversion worldwide weighing on high-yielding emerging market currencies amid worries over the impact of the US ‘fiscal cliff’ on the world’s largest economy. Indeed, most Asian currencies and the euro have lost ground this week as risk appetite comes off ahead of a crucial meeting between US lawmakers to discuss measures to tackle the fiscal cliff. The euro has shed 0.10% over the week and was trading around $1.2735 in mid-day trades on Friday.

On Friday, the Sensex closed down 162 points, or 0.88%, at 18,309 with investors taking their cues from the Asian markets where the Kospi was down 0.5% and the Shanghai Composite lost 0.7%. A dismal opening by European stocks prompted some profit-taking by domestic institutions which have sold stocks close to $400 million in November. The rupee, say treasurers, could go further south if the government doesn’t take concrete steps on FDI that it proposed two months ago.

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