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Rupee plunges to close at 46.90/$

The rupee ended at an all-time low against the dollar at Rs 46.87/90 on Thursday, dragged down by fears that foreign fund inflows could dry up on concerns of poor earnings outlook for software firms, dealers said.

At 11:48 a.m., the rupee was quoted at 46.9000/9200 per dollar, just off a lifetime low of 46.93, but sharply weaker than Wednesday's close of 46.6850/6900. Its previous low was 46.92, hit in October 2000.

Traders said volumes were not high and that they did not expect significant demand from companies until the volatility in the exchange rate abated.

"Traders are worried that the poor earnings outlook for software firms could lead to a slowdown in foreign fund inflows," said a dealer at a state-run bank.

"Most of the morning's trade was inter-bank. Corporates may be waiting for the volatility to ease a bit," he said.

Indian shares slumped over six percent to hit a 27-month low in early trade on Thursday, led by sharp declines in infotech stocks after sector bellwether Infosys Technologies forecast a marked slowdown in revenue growth.

"At the moment, it's a thin market and I think the dollar is being bid up unreasonably," said a dealer at a foreign bank.

"We are not very sure what's behind all this buying, but it appears to be the sharp fall in share prices and fears that foreign funds may pull out," he said.

Indian shares slumped over 6 per cent to hit a 27-month low on Thursday, led by sharp declines in infotech stocks after sector bellwether Infosys Technologies forecast a marked slowdown in revenue growth.

The rupee opened on a distinctly weak note at Rs.46.73/75 on a spillover of heavy morning dollar short covering.

Nervousness gripped for spot trade, as banks and corporates scrambled to cover short dollar positions which took a heavy chunk of the rupee value, dealer said.

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