Date:31/05/2006 URL: http://www.thehindubusinessline.com/2006/05/31/stories/2006053104430100.htm

Back Re touches new six-month low

Our Bureau

Mumbai , May 30

Continuing its downward movement, the rupee on Tuesday touched a new low against the US dollar in six months.

Selling by FIIs in equities and a fear of dollar shortage pushed the rupee down for the second day in a row, said dealers.

Banks continued to buy dollars on behalf of their clients to meet the month-end requirements.

The Indian currency opened a tad higher at 46.07/09 driven by the overall dollar weakness.

The rupee then fell to a low of 46.2905 during intra-day session and ended trade at 46.28. This level was last seen in December 2005. The next resistance for the rupee could be at 46.42, said a forex dealer.

"The rupee could touch the level of 46.42 in a couple of days. This could be followed by a correction, which could push the rupee up a bit," he said.

The stock market witnessed selling pressures by foreign funds on Tuesday. Volatility in stock prices continued and the benchmark BSE Sensex ended the day lower by 66.51 points at 10,786.63.