Updates from world of business

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Rupee Breached 45 Levels

The Indian rupee on Wednesday breached the crucial 45-level against the US currency for the first time after November 2006 following sustained appreciation in dollar against major currencies in overseas markets. The Indian rupee which has seen appreciated to as much as 39 against the dollar last year, but the INR has again started depreciating since June this year.

The breaching of the crucial 45-level by the rupee against the US dollar for the first time in 21-month may augur well for exports in the country, but is likely to fuel inflation further, which is hovering over 12 per cent at present, experts feel.

"The huge demand for dollar and mismatch in supply has led to the continuous pressure on rupee, while foreign inflows have also slowed down this year. The depreciation could be a cause of concern for the inflation levels in the country as well although it may help the exporters," Punjab National Bank general manager Arun Kaul said.

Market men believe the uncertainty in the forex market is likely to continue for the coming days and the decline of rupee would obviously impact the imports of the country, with the main one being crude oil.

"After breaching the 45 a dollar mark, the rupee is likely to face strong resistance in the 45.5 to 46 a dollar range. And it is unlikely that it might drop further to 46 level...it is likely to consolidate at current levels for the next 10-15 days," brokerage firm SMC Global vice president Rajesh Jain said.

Market Story

It was a bad day for the Indian market on account of global headwinds. Sensex shut shop at 14662, down 238 points and Nifty at 4400, down 68 points from the previous close. CNX Midcap index was down 0.79% and BSE Smallcap index was down 0.88%. BSE Metal index was down 5%. The market breadth was negative with advances at 338 against declines of 933 on the NSE. Top Nifty gainers included Suzlon, Hero Honda and ACC while losers included Sterlite, SAIL and Tata Steel.

Crude Oil Fluctuates

Brent crude oil prices fell below $100 a barrel for the first time in five months on Tuesday on expectations that OPEC would leave formal output targets unchanged and as Hurricane Ike's threat to US Gulf of Mexico energy infrastructure receded.

London Brent fell $3.88 to $99.56 a barrel -- the first time world oil prices have traded in the double digits since April 2 -- while the US benchmark fell $3.55 to $102.79 a barrel.

Oil prices rose on Wednesday in Asia after OPEC said it would cut more than 500,000 barrels a day of production that exceed its self-imposed output quotas.

Light, sweet crude for October delivery rose 49 cents to US$103.75 a barrel in electronic trading on the New York Mercantile Exchange midday in Singapore. The contract fell US$3.08 overnight to settle at US$103.26, the lowest close since April 1.

Sources…

Rediffmail

TOI