MARKET HEADLINES
- Rupee hits 3-1/2-month low; stocks slide on tax worries
The rupee fell to a three and a half month low in early trade on Tuesday as concerns over retrospective taxation loomed among foreign investors, while weak Asian peers and broad dollar strength added to the pressure. Stocks also fell to their lowest in nearly four weeks. The partially convertible rupee fell to 63.1550 per dollar, its lowest since Jan 8 and compared to its previous close of 62.91/92 when it had fallen the steepest intraday since Dec. 16. The broader 5-share NSE index fell 0.38 percent, its lowest since March 30, and headed towards a fifth consecutive day of decline.
- Euro weak on Greek funding concerns, trades near 3- month low vs Swiss franc
The euro fell across the board on Tuesday, as details emerged on a European Central Bank proposal to increase the insurance it would demand in return for emergency funding to Greek banks. Bloomberg, citing people with knowledge of the discussions, reported that the ECB staff have prepared a proposal to increase the haircut on the security that Greek banks offer in return for emergency liquidity. The report deepened worries that Greece was heading towards a cash crunch which would force it to default on its debt and eventually exit the currency union. With Greece at the forefront, political risks overshadowed a mixed German ZEW survey, traders said. The euro was down 0.5 percent against the dollar at $1.0688 ,its second straight day of losses. It was also weaker against the yen at 127.65 yen while against the safe-haven Swiss franc it was down 0.2 percent at 1.0255 francs not far from its lowest in nearly three months.
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