RTRS: India rupee weakens for 3rd day on shares, dlr moves
* Main share index ends 0.01 pct lower in choppy trade
* Dollar index up 0.1 pct
* Refiners continue to buy dollars to meet import commitments
* Rupee seen in 46.35-46.55/dlr range on Friday-trader
(Updates to close)
By Anurag Joshi
MUMBAI, Feb 25 (Reuters) - The Indian rupee weakened for the third straight day on Thursday, easing to its lowest in nearly a week, as choppy shares raised concerns about capital outflows and the dollar's rise overseas weighed on sentiment.
Traders also awaited the federal budget on Friday for cues on foreign investment flows in the coming weeks.
Finance Minister Pranab Mukherjee will present the budget for the fiscal year 2010/11 against a backdrop of strong economic rebound, which should set the stage for withdrawal of stimulus measures and fiscal consolidation.
The partially convertible rupee INR=IN ended at 46.3950/4050 per dollar, off an intraday low of 46.44, its weakest since Feb. 19 and slightly weaker than Wednesday's close of 46.32/33.
"The seesaw movement of the Sensex added to the uncertainty about flows. But the dollar's rise was the dominant factor," said a senior trader with a foreign bank, adding he expects the rupee to trade in the 46.35-46.55 range on Friday.
The benchmark BSE share index ended 0.01 percent lower after flip-flopping through the session. [.BO]
Foreign portfolio flows are the key driver of the rupee, but data released by Nomura showed foreigners were net sellers of nearly $1.7 billion in domestic shares in the 12 weeks to Feb. 19. [ID:nSP71245]
The dollar's gains also weighed on sentiment for the rupee. The dollar index .DXY versus six majors traded about 0.1 percent up. .DXY [USD/] "The dollar's rise has triggered some demand from importers, mainly refiners," said the traders.
Oil CLc1 is India's biggest import and refiners are the largest buyers of dollars in the local currency market. Demand for dollars tends to peak at the end of each month, when importers make payments.
One-month offshore non-deliverable forward contracts PNDF were at 46.44/48.
In the currency futures market INRFUTURES, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were quoted at 46.2525 on both exchanges. (Editing by Ramya Venugopal)
