MUMBAI (Reuters) - The rupee dropped on Monday in tandem with lower stock markets, which could slow down foreign inflows, and a stronger dollar overseas.
At 10:57 a.m. (0527 GMT), the partially convertible rupee was at 48.68/69 per dollar, 0.4 percent weaker than its previous close of 48.48/49. It had risen 0.9 percent last week.
"It is the same old story -- stocks are down, so the rupee has also weakened," said Ashtosh Raina, head of foreign exchange trading at HDFC Bank.
He expected the day's range at 48.50-48.80.
Shares dropped 0.9 percent early as weak Asian markets encouraged investors to take profits after a six-session rally.
Moves in the stock market are a key factor influencing capital flows in and out of India. Foreigners have bought a net $8.7 billion worth of shares this year, helping the rupee climb back from record a low of 52.2 in early March.
The index of the dollar versus six majors was up 0.4 percent. The Australian and New Zealand dollars fell sharply against the U.S. unit as speculators covered short positions that had pushed the greenback to one-year lows.
Dealers said dollar demand from oil refiners was also adding to the pressure on the rupee.
Oil is India's biggest import with refiners being the largest buyers of dollars in the local currency market.
One-month offshore non-deliverable forward contracts were at 48.71/81, marginally weaker than the onshore spot rate.
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