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Rupee weakens to 44.76 per $ intra-day

The Indian rupee weakened further in noon trade on heavy dollar demand believed to be from foreign funds.

Dealers said foreign funds had bought dollars on Tuesday and their requirements on Wednesday seemed even higher.

A north-based corporate was also buying dollars, they said

The rupee was quoted at 44.775-79 per dollar in noon deals. It had opened weak around 44.75-765 per dollar compared with Tuesday's closing 44.745-75.

State-run firms were not seen selling dollars to check the rupee's slide, dealers said.

"There is pressure because demand is heavy. But there is no panic though the dollar has risen above 44.75. Spreads are still narrow," a dealer with a state-run bank said.

The State Bank of India sold dollars on Tuesday when the rupee weakened on import purchases by diamond firms, a state-owned oil firm, another petrochemicals firm and other corporates, dealers said. Foreign funds have been selling Indian stocks continuously.

So far foreign funds have sold $201.2 million worth stocks in July, adding to their net sales of $230.7 million in June.

That has brought their net investment in Indian markets down to $143 million from April until now compared with around $3 billion they invested in 1999-2000.

Forward premiums were higher tracking the weak rupee.

The six-month forward premium was quoted at 3.79 per cent compared with Tuesday's 3.66 per cent.

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