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Rupee eases as equities slide
Published on 27 Dec. 2008 12:58 AM IST
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The rupee gave up early gains to end lower on Friday, as a slide in local share prices triggered new concerns of capital outflows. The partially convertible rupee reversed gains to fall to 48.60 per dollar before ending at 48.44/45, 0.8% weaker from Wednesday's close of 48.07/08. It had hit an early intraday high of 47.70 after the main share index opened higher. Equities gave up early gains and fell 2.5% on Friday, after sharply lower advance tax payments by companies pointed towards dismal quarterly earnings next month. "Mainly, it was the stock market and tensions with Pakistan. It had opened higher in the morning because of higher stock prices and also many banks unwound overnight long-dollar positions," the chief forex dealer at West Asian Bank said. Foreign investors have sold more than $13 billion of local shares in 2008, but have bought a net $366 million this month. Dealers said a TV report that the prime minister was meeting defence chiefs in New Delhi to review security had turned sentiment slightly jittery towards the close. However, a spokesman for the prime minister's office said the meeting was about pay for the armed forces, although the regional security situation was discussed.

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