Rupee falls to 2.5 year low; stocks weigh

MUMBAI: The rupee fell to its lowest levels in more than two and a half years on Friday as negative local shares weighed.

At 9:15 a.m., the partially convertible rupee was at 50.2400/2600 per dollar, 0.1 percent weaker than Wednesday's close of 50.1750/1850, after touching a low of 50.4200, a level last seen on April 28, 2009.

Traders expect the rupee to trade in a 50.20-50.50 range during the day.

The market was closed on Thursday for a religious holiday.

Analysts polled by Reuters were bearish on the rupee's outlook. The currency may retest a record low of 52.20 per dollar on a widening trade deficit, falling car sales and a Moody's outlook downgrade of the country's banking sector.

The euro was at $1.3629 from $1.3643 at the close of rupee trade on Wednesday.

The BSE Sensex slipped nearly 1% in early trade on Friday, led by losses in Infosys Ltd, Tata Steel and Reliance Industries Ltd.

Shares of Tata Steel slipped over 5% in early trade to Rs 423.60 after the world's seventh-largest steelmaker, reported 89.3% decline in consolidated net profit for the second quarter ended September.

Asian stock markets were mostly higher Friday following signs of progress in debt plagued Europe, a successful bond sale in Italy and the naming of a new leader in Greece.

Hong Kong's Hang Seng gained 0.9 percent to 19,132.73 and South Korea's Kopsi added 1.7 percent to 1,844.66. Australia's S&P/ASX 200 rose 0.7 percent to 4,272.20. Benchmarks in Singapore, Taiwan, mainland China and New Zealand also rose.

After opening higher, Japan's Nikkei 225 index slipped 0.2 percent to 8,487.50, a day after the index fell to a five-week closing low of 8,500.80.

For the most part, investors were calmed by news that Greece, which is struggling to pull back from the brink of bankruptcy, had named Lucas Papademos, a respected economist, as its new prime minister on Thursday.