Bloomberg News

Mauritius Stocks Reach 3-Month Low, Rupee Slips on Risk Aversion

July 27, 2011

July 27 (Bloomberg) -- Mauritian stocks fell to the lowest in more than three months and the rupee snapped three days of increases against the dollar as the deadlock on raising the U.S. debt ceiling curbed appetite for riskier markets.

Mauritius Commercial Bank, the country’s largest lender by market value, led declines in the 38-member SEMDEX gauge, which dropped 0.4 percent to 2,030.64, the lowest intraday level since April 11, by 12:14 p.m. in Port Louis, the capital. The rupee weakened as much as 0.4 percent to 28 per dollar. The currency was little changed at 40.5512 per euro.

The administration of U.S. President Barack Obama threatened a presidential veto of House Speaker John Boehner’s two-step plan to raise the $14.3 trillion debt ceiling and cut $3 trillion in expenditure. A vote on the measure had been scheduled for today and was postponed until tomorrow, before an Aug. 2 deadline when Treasury Secretary Timothy F. Geithner has said the U.S. will run out of options to prevent a default.

“As U.S. policy makers continue their bickering about a debt deal, uncertainty has growth in the markets, favoring safe havens,” analysts at Mauritius Commercial Bank wrote in an e- mailed note to clients today.

Mauritian Finance Minister Pravind Jugnauth yesterday said he and four other ministers from his party resigned from the Cabinet in solidarity with Santi Bai Hanoomanjee, the health minister who was charged with graft.

“The deadlock on U.S. debt ceiling overrides the local political turmoil,” Eric Ng, an economist and director of PluriConseil Ltd., said by phone. “It will take at least two weeks for a proper assessment of the impact of the finance minister’s resignation on the local markets.”

Buying prices for the dollar ranged from 27.1592 rupees to 27.3173 rupees, with a selling price of 28.6135 rupees per dollar, according to indicative rates on Bank of Mauritius’s website.

--Editors: Ana Monteiro, John Kohut

-0- Jul/27/2011 08:18 GMT

-0- Jul/27/2011 08:32 GMT

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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