News Column

Sensex gains, rupee dips

June 9, 2014


Mumbai: Continuing their record-breaking spree, equity benchmarks Bombay Stock Exchange Sensex and National Stock Exchange Nifty on Monday closed at new highs, boosting stock wealth by Rs1 lakh crore, on across-the-board buying enthused by Narendra Modi-led government's investor-friendly economic agenda.

Overall, 10 out of 12 BSE sectoral indices closed up. Realty, capital goods, power, metal, consumer durable and auto segments led the pack. Investor wealth rose to Rs90.26 lakh crore as 2,300 stocks rose of the over 3,100 traded.

The Sensex resumed strong on firm Asian cues and improved further to a new intra-day historic high of 25,644.77 before settling at 25,580.21 also new closing peak-up by 183.75 points or 0.72 per cent. In straight three sessions, it has jumped by 774.38 points or 3.12 per cent.

Bajaj Auto, Coal India and L&T led the 20 Sensex gainers. The broader 50-issue CNX Nifty of the NSE also flared up by 71.20 points, or 0.94 per cent, to log its fresh closing high of 7,654.60. It touched a new intra-day peak of 7,673.70.

Addressing a joint sitting of parliament, Indian President Pranab Mukherjee said curtailing food inflation will be Prime Minister Narendra Modi's top priority as his government pursues broad economic reforms focused on job creation, reviving growth, encouraging foreign direct investment (FDI) and introducing a non-adversarial tax regime.

Remarks on infrastructure programmes, revamping of railways and enhancing electricity generation capacity also boosted the market sentiment, sending indices to new peaks.

"Markets rose after President Mukherjee unveiled new government's economic reforms agenda, which included introducing GST, encouraging foreign investment and speeding up nods for major business projects" said Jayant Manglik, president (Retail distribution) at Religare Securities.

Currency depreciates

The Indian rupee yesterday washed out initial gains and logged its first drop in four sessions to end at 59.20 against the dollar on late demand for the American currency from importers.

At the Interbank Foreign Exchange (Forex) market, the rupee commenced higher at 59.10 a dollar from its previous close of 59.17. It later improved further to a high of 58.98 on bullish local equities.

However, the rupee met with strong resistance and dropped to a low of 59.23 on late dollar demand from importers before closing at 59.20, showing a fall of 3 paise or 0.05 per cent.

In the previous three sessions, it went up by a total 21 paise.

"We now look for dollar-rupee to be at 60 by year-end 2014 (from 62), although FX policy is likely to impede INR strength . The new government's strong mandate has given rise to optimism for reforms that could unlock economic potential," wrote Paul Mackel, head of Asian FX Research, HSBC.

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Source: Times of Oman

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