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Rupee off record lows on bank dollar sales

The rupee recovered on Thursday afternoon on dollar sales by a state-run bank and another European bank, after it hit record lows in early trade.

At 2:05 p.m., the rupee was quoted at 46.8450/8600 per dollar, off a lifetime low of 46.94.

Its previous low was 46.92 in October 2000.

Dealers said the state-run bank probably sold on behalf of the central bank to check excessive falls in the rupee.

But the market was puzzled by the large lots of dollar selling by the European bank with no clue on whether it was unwinding long positions or selling on behalf of a foreign investor.

Earlier the rupee fell sharply continuing Wednesday's slide, driven by fears that foreign fund inflows could dry up on concerns of poor earnings outlook for software firms.

Dealers said a state-run firm bought a large amount of dollars to hedge imports earlier in the day.

Some other big corporate houses also purchased dollars.

Indian shares also recovered in the afternoon after slumping over six percent to 27-month lows in early trade, led by sharp declines in infotech stocks after sector bellwether Infosys Technologies forecast a marked slowdown in revenue growth.

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