Rupee falls tracking weak local shares

The rupee eased on Tuesday in line with a fall in local equities and the dollar's strength versus the euro overseas underpinning sentiment.

At 1.55 pm, the partially convertible rupee was at 46.89/90 per dollar, weaker than Monday's closing of 46.77/78 per dollar. It touched an intraday low of 46.95.

The benchmark BSE share index was down about 0.2 percent, led by technology stocks, as investors ignored a guidance upgrade by Infosys Technologies and concentrated on a rare drop in its June quarter earnings.

Infosys said today its net profit in the June quarter fell to Rs 1488 crore ($318 million) from Rs 1527 crore a year ago.

The dollar's rise against the euro also hit sentiment. The euro fell broadly on Tuesday after ratings agency Moody's downgraded Portugal, exacerbating concerns over peripheral euro zone debt ahead of a Greek T-Bill auction.

Moody's cut Portugal's debt rating by two notches to A1 with a stable outlook, saying the government's financial strength was likely to weaken over the near-term.

One-month offshore non-deliverable forward contracts were quoted at 47.05, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 47.0, with the total traded volume on the two exchanges at about $2 billion.