The Indian rupee ended flat on Thursday as a falling stock market prevented it from holding on to gains posted after a foreign investment-friendly budget.
Shares fell after the federal budget proposed a 0.15 percent turnover tax on all exchange-transacted securities, triggering fears of a slump in trading volumes.
Earlier, the rupee gained as much as 0.3 percent to post a session high of 45.72 after sentiment was buoyed by budget proposals raising the ceiling on foreign direct investment in the telecom, insurance and infrastructure sectors. The rupee closed unchanged at 45.8400/8600 per dollar, well off an immediate post-budget high of 45.72 per dollar.
"The stock market jitters hurt sentiment and even though there is nothing fundamentally in the budget to weigh on the rupee, the mood was affected," a dealer at a state-run bank said.
India's left-backed government presented a federal budget which vowed to foster investment to maintain strong economic growth and cut the fiscal deficit while at the same time proposing to boost spending for the poor by billions of dollars.
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