* Rupee closes at 55.73/74 a dlr vs 55.5350/5450 on Fri
* Heavy dlr buying by oil firms to meet mnth-end commitments
* Traders expect rupee to head below 56/dlr in near-term
* Mkt on watch out for RBI intervention to slow rupee fall
By Swati Bhat
MUMBAI, Nov 27 (Reuters) - The Indian rupee slid for a fifth
day on Monday and hit its lowest level in more than
two-and-a-half months, weighed down by heavy dollar buying by
oil refiners, with gains in the euro failing to offer much
Oil firms are the biggest buyers of dollars in the domestic
market, with demand tending to peak at the end of each month
when they are required to make payments to meet import
Traders said the absence of any large dollar supply in the
market led to exaggerated moves in the dollar/rupee.
The adjournment of parliament for a third consecutive day
was another dampener for the local currency as hopes that the
government would push through key reforms in this session
received yet another jolt.
"The rupee broke the key resistance of 55.80 today, so 56
looks quite likely in the near-term, possibly as early as
tomorrow," said Subramaniam Sharma, director at Greenback Forex.
"There has been heavy demand from oil firms and the market
was hoping that reforms for FDI in retail will get passed in
this session, but that is looking difficult now. Hopes for
inflows related to that have reduced, so exporters are also
holding off and not selling, thus hurting the rupee," Sharma
Traders said they were also watchful of any central bank
intervention after it was believed to have stepped in on Friday
to prevent a sharp fall in the rupee. The next key resistance
for the rupee is at 56.03, the low on Sept. 6, traders said.
The partially convertible rupee closed at 55.73/74
per dollar, 0.35 percent weaker than its Friday's close of
55.5350/5450. The unit had dropped as low as 55.89 during the
session, its weakest since Sept. 6.
Traders said gains in the domestic sharemarket failed to
provide much respite for the Indian currency which appears to be
getting more and more delinked from global markets, with sharp
gains in the euro also not helping.
Indian shares rose 0.16 percent, led by gains in
export-driven technology shares such as Infosys, following
weakness in the rupee, while airline shares such as Jet Airways
surged on stake sale talks.
Moves in shares are closely watched for gauging the foreign
fund flow direction. Foreign funds have so far in 2012 purchased
shares worth more than $19 billion.
The euro retreated from a seven-month high against the yen
on Monday as traders booked profits on its recent rally,
although expectations that Greece will secure new emergency
loans would check losses.
In the offshore non-deliverable futures market, the
one-month contract was at 56.04 while the three-month was at
The one-month onshore forward premiums rose as high
as 32 points, its highest in a week and compared with 29.50
points on Friday as lack of dollar supply in the system pushed
In the currency futures market, the most-traded
near-month dollar/rupee contracts on the National Stock
Exchange, the MCX-SX and the United Stock Exchange, all closed
at around 56.69 with a total traded volume of $7.7 billion.
(Editing by Anupama Dwivedi)