Rupee weak on equities, euro fall

The rupee fell in afternoon trades on Friday as local equities stayed negative and dollar demand from oil companies lingered. A fall in the euro also hurt sentiment.

* At 2:14 p.m., the partially convertible rupee was at 52.22/23 per dollar, weaker from Thursday's close of 52.065/075. The unit has so far moved in the 52.07-58.27 band.

* Traders said some comfort was seen from the government's decision to liberalise foreign investment in the $450 worth retail market, but big positions could be seen only after actual inflows materialise.

* Views that the Reserve Bank of India would act to stem any sharp weakness in the rupee from current levels also helped limit the fall, traders said.

* RBI Governor D. Subbarao said the bank is watching the rupee, but could not say whether it will intervene in forex market directly.

* The RBI is suspected to have sold dollars after the rupee hit record low of 52.73 on Tuesday. The rupee has slipped nearly 17 percent from its strongest point in 2011 hit late July.

* The BSE Sensex was down more than 0.4 percent reflecting the global economic gloom.

* The euro fell to a fresh seven-week low against the dollar on Friday and was set to weaken further as a lack of agreement between European leaders on how to tackle the spreading debt crisis in the euro zone continued to rattle nervy investors.

* Oil is India's biggest import item and local oil refiners are the largest purchasers of dollars in the domestic currency market.