Indian rupee ends flat as stock slump, importer hedging erodes bounce

The rupee finished almost level on Monday, wiping out its small early advance as domestic equities declined and importers bought dollars. It traded between 94.76 and 94.96 during the session before settling at 94.9250, close to Friday's closing level, according to Business Recorder.

The Nifty 50 lost more than 1%, with heavyweight information technology and financial shares leading the decline, and both sectors are widely held by overseas investors. Traders said importer dollar demand also weighed on the currency, even as Brent crude slid about 2% to $108 a barrel. That oil drop came after US President Donald Trump chose to set aside some sanctions on Russia, and Secretary of State Marco Rubio said the president would take up to 60 days to weigh the effect of those sanctions and tariffs on the global economy.

Attention is also on the US midterm elections, which an FX salesperson at a foreign bank described as a risk event, and on minutes of the Reserve Bank of India's October policy meeting, where the central bank raised rates for the first time in four years. ANZ expects a 25bp increase in December, but persistent currency pressure despite recent RBI measures would lift the chance of a 50bp hike or a repo rise combined with a higher Marginal Standing Facility rate.