MUMBAI: The Indian rupee ended little changed on Tuesday after earlier hitting a one-month low as oil companies accelerated dollar purchases, offsetting optimism that new stimulus measures in Japan would continue to push foreign investors into emerging markets.
European shares rose and bond yields fell on Tuesday on strong German investor sentiment data and hopes that a possible snap election in Japan might lead to more economic stimulus measures.
Any measures by Japan to stimulate its economy via monetary easing could raise expectations of inflows into emerging markets such as India at a time when the European Central Bank is also contemplating more measures of its own.
But the rupee has so far failed to benefit from these expectations, given the broader global gains in the dollar, and has shed around 0.63 percent in the month so far.
"The global growth scenario is far more weaker than before. The rupee should remain in the 61-62 range in the near term." said Anindya Banerjee, a currency analyst at Kotak Securities in Mumbai.
The partially convertible rupee closed at 61.74/75 per dollar versus its previous close of 61.73/74, after earlier touching a low of 61.8750, its weakest level since Oct. 16.
Traders said oil importers stepped up dollar purchases. The rupee also failed to give much of a lift from domestic shares, which hit record highs earlier in the day, but ended largely flat as investors booked profits.
In the offshore non-deliverable forwards, the one-month contract was at 62.01/11 while the three-month was at 62.54/64.
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