MUMBAI: The Indian rupee fell on Friday, snapping four sessions of gains as tumbling global markets raised fears about foreign investments while caution also prevailed ahead of key inflation data due next week.
Global shares fell to a six-month low on Friday as investors worried about the prospect of a widespread economic slowdown just as US monetary stimulus nears its end.
That dented what had been a good week so far for the rupee, which rose to a 2-1/2 week high against the dollar in the previous session. The unit ended up posting its first weekly gain in five. Traders said global factors and data will remain key for the rupee, with India set to post industrial output data after the close of markets and consumer inflation data on Monday.
"I do not see the rupee gaining beyond the 60.80 level on a sustainable basis," said Param Sarma, director and chief executive officer at NSP Forex, a consultancy firm.
"Also, the dwindling portfolio flows could limit the rupee's rise," he added. The partially convertible rupee closed at 61.34/35 per dollar compared with 61.04/05 on Thursday.
For the week, the rupee gained 0.4 percent, its first weekly gain in five. But on Friday the rupee was hit by tumbling global shares, with domestic indexes falling 1.3 percent,
their biggest falls in 2-1/2 weeks.
Foreign funds have been sellers of equities worth $128.34 million so far this month, though they remain net buyers of $13.76 billion in 2014. They have bought $20.65 billion in debt.
In the offshore non-deliverable forwards, the one-month contract was at 61.65 while the three-month was at 62.27.
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