Rupee eases on outflow worries, stocks eyed

Enlarge Photo A money changer counts U.S. dollars in Mumbai in this May 21, 2003 file photo....

Tue, Jul 8 09:26 AM

MUMBAI (Reuters) - The Indian rupee weakened on Tuesday as lower Asian stock markets raise prospects for more foreign fund outflows, but the Reserve Bank of India is expected to curb any sharp fall.

* At 9:06 a.m., the partially convertible rupee was at 43.31/32 per dollar, a shade weaker than Monday's close of 43.295/305. It hit a 15-month low of 43.50 last week.

* Asian stocks were weighed down by the financial sector after sharp declines in shares of Fannie Mae and Freddie Mac on funding concerns reminded investors about the fragility of global credit markets.

* Foreign funds have been net sellers of $6.7 billion worth of Indian shares this year, helping push the rupee down 9 percent so far in 2008. Last year, they had bought a record $17.4 billion of shares and pushed the rupee up more than 12 percent.

* Indian shares rose on Monday but there was little conviction for a recovery as the market shed most of the day's gains with investors bracing for an interest rate rise.

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