Rupee opens lower at 55.83 against dollar .

The Indian rupee opened marginally weaker against the US dollar on Tuesday tracing Asian markets which fell on renewed concerns over the worsening debt crisis in Europe. Euro, which hit its highest since May 23 of $1.26694 on Monday, too fell against the dollar to 1.2494.

Indian benchmark indices - NSE Nifty and BSE Sensex are expected to trade lower on Tuesday. They were both down over 0.5 per cent in pre-market trade today.

Both the rupee and stock markets fell on Monday after S&P warned that India may be the first BRIC country to lose its investment-grade rating. The credit rating agency cited slowing GDP growth and political roadblocks to economic policymaking as some of the factors that could lead to such an action.

The rupee closed 0.58 per cent or 32 paise lower at 55.74 to the dollar, off the day’s low of 55.82 after opening higher on Monday.

Asian markets reversed the previous day's hefty gains on Tuesday as a European bailout for Spain's debt-stricken banks failed to convince investors that the spread of the debt crisis in Europe will be halted.

Markets worried the weekend deal could further aggravate Spain's rising public debts, while attention is turning to problems in Italy and the June 17 election in Greece that could determine its fate within the common currency bloc.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.5 per cent, after posting its biggest daily gain in almost 5 months in the previous session. Japan's Nikkei average opened down 1.7 per cent, after Wall Street fell sharply in a late sell-off.

The rupee has recovered since hitting a string of record lows last month, with the latest hit on 31 May when it dropped to 56.52 to the dollar, marking what so far has been a near-term bottom for the local currency.

Traders are becoming a little less pessimistic, with a poll showing bearish bets on the rupee fell after hitting a six-month high in May.

Widespread expectations the Reserve Bank of India will cut interest rates on 18 June are helping spark some hope for the faltering domestic economy, though the rupee will likely remain beholden to global risk factors in the near-term.

Source : profit.ndtv.com