India's Rupee Slides Most in Three Weeks as Rally Seen Overdone

India’s rupee halted a six-day advance on speculation some investors judged the currency’s gains to be excessive.

The rupee dropped 0.4 percent to 67.3325 a dollar as of 11:57 a.m. in Mumbai, set for its biggest decline since Feb. 16, prices from local banks compiled by Bloomberg show. The dollar’s 14-day relative-strength index versus the rupee was at 33.6 on Friday, near the 30 level that indicates to some traders a reversal is likely. Indian markets were shut Monday for a local holiday.

“We saw an extended rally and some depreciation was required,” said Gaurav Sharma, a senior currency analyst at Religare Commodities Ltd. in Noida, near New Delhi. He predicts the rupee in a 67-67.50 a dollar range for the day.

The Indian currency jumped 2.4 percent in the last six days and rose to a seven-week high of 67.0850 on Friday as foreign funds boosted holdings of local stocks amid a revival in global sentiment for Equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term. The inflows followed Feb. 29 budget announcements by Finance Minister Arun Jaitley, including retaining the government’s goal of narrowing the fiscal deficit to a nine-year low and boosting spending on roads, ports, power plants and other public projects.

Sovereign bonds rose, with the 10-year Yield Yield A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a Read this Term dropping one basis point to 7.62 percent, according to prices from the Reserve Bank of India’s trading system. It slipped 15 basis points last week. India plans to auction 46.81 billion rupees ($695 million) of government debt quotas to foreign investors after the close of markets.

To contact the reporter on this story: Nupur Acharya in Mumbai at nacharya7@bloomberg.net. To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net, Shikhar Balwani, Simon Harvey

By: Nupur Acharya

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