Indian rupee falls to 1-month low as shares extend losses
An employee counts Indian rupee currency notes in New Delhi.
Mumbai - The rupee weakened 0.5 per cent to 65.5850 a dollar in Mumbai.
India's rupee fell to a one-month low as losses in local stocks deepened and foreign holdings of the nation's bonds declined.
The benchmark S&P BSE Sensex of shares retreated for a sixth day, the longest losing run since June, while outflows from rupee-denominated debt were the biggest in seven weeks in the five days ended on October 30.
"The rupee seems to be tracking the decline in stocks," said Gaurav Sharma, a senior currency analyst at Religare Commodities in Noida, near New Delhi. Investors are also concerned that the allure of Indian assets will dim as the Fed moves toward a December liftoff, he said.
The rupee weakened 0.5 per cent to 65.5850 a dollar in Mumbai, prices from local banks compiled by Bloomberg show. It fell to 65.62 earlier, the lowest level since October 1. The currency declined 0.7 per cent last week as global holdings of bonds dropped Rs8.3 billion ($126 million), according to data from the National Security Depository Ltd.
The yield on 10-year sovereign notes fell one basis point to 7.63 per cent, prices from the Reserve Bank of India's trading system show. It climbed 10 basis points last month in its biggest advance since June. The Sensex lost 0.4 per cent on Monday.
The quarterly earnings at some of the largest companies missed forecasts and reports showed contraction in China's manufacturing sector.
Sun Pharmaceutical Industries, the most valuable drugmaker, fell to a four-week low after saying growth in revenue and profit will be adversely impacted in the year ending in March. Larsen & Toubro, the top engineering company, decreased for a 10th day after paring its outlook on revenue growth last week. Bajaj Auto was the worst performer on the S&P BSE Sensex after sales slid in October.
The Sensex slid 0.4 per cent to 26,559.15 at the close, completing the longest stretch of losses since June. While 72 per cent of its members that posted results for the September quarter have matched or beaten estimates, versus 60 per cent in June, the gauge's profits have risen just two per cent over the previous quarter, data compiled by Bloomberg show. The index's valuation climbed to 15.9 times projected 12-month earnings last week, the most expensive since August.
"Earnings are looking tired across most sectors, while valuations in some high-growth sectors like pharma and consumers are looking stretched," Parag Thakkar, the head of institutional sales at HDFC Securities in Mumbai, said in an interview. - Bloomberg