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Rupee, reforms and rains buoy markets, Sensex up 424 points

bull marketMumbai:(IANS) A strengthening rupee, efforts to restart reforms and expectation of more rains, coupled with positive Asian market cues, propelled the barometer index of Indian equities into gaining 424 points on Tuesday.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose after two consecutive session of losses of 871 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) too made gains during the day’s trade. It ended higher by 129.45 points or 1.71 percent at 7,688.25 points.

The S&P BSE Sensex, which opened at 24,972.01 points, closed at 25,317.87 points — up 424.06 points or 1.70 percent from the previous day’s close at 24,893.81 points.

The Sensex touched a high of 25,411 points and a low of 24,833.54 points in the intra-day trade.

Analysts pointed out that government’s consultative efforts to understand the problems of India Inc at the time of global markets’ turmoil and positive Asian market cues, boosted Indian equities.

Prime Minister Narendra Modi (Tuesday) held a high level consultative meeting on ‘Recent Global Events: Opportunities for India’ here. The meeting was attended by over 40 delegates, including top government officials, industry representatives and leading sectoral experts.

“The PM’s meeting today sent a very positive sign to the markets — that even the PM is aware of the problems faced by the economy and the government is keen to initiate action and reforms,” Alex Mathews, head, research, Geojit BNP Paribas Financial Services told IANS.

“The top industry representative would have pointed out the problems of credit and other worries faced by them.”

In addition to the government’s efforts, easing investors’ anxiety was the Indian rupee gaining strength a day after falling to its lowest levels against the US dollar in over two years.

The Indian rupee closed at 66.55 to a dollar, a gain of 27 paise from its previous close of 66.82 to a greenback. The rupee had touched an intra-day weakest point of 66.90.

“The rupee gained on the back of a rally in the global currencies market against the dollar. Most of the currencies are either a quarter or half a percent up against the dollar,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities explained to IANS.

According to Mathews, the market’s upward trajectory was in part supported by the domestic retail and institutional investors, while the foreign portfolio investors (FPIs) shipped out funds.

“We have seen time and gain that the DIIs have been active in the markets and are supporting the upward movement. Even the Chinese Shanghai stock exchange showed some improvements and gains today,” Mathews added.

As per data with the stock exchanges, on net value basis FIIs sold shares worth Rs.659.67 crore and DIIs invested in Rs.447.41 crore on Tuesday.

Among the Asian markets, Hong Kong’s Hang Seng gained by 3.28 percent, China’s Shanghai Composite Index was higher by 2.93 percent. However, Japan’s Nikkei inched down by 2.43 percent.

Other factor that boosted investor confidence was the clarification given by the India Meteorological Department (IMD) that it had not lowered its long period average rainfall projections.

“Markets turned positive after the IMD clarification yesterday (Monday) that it has not downgraded its June-September monsoon forecast,” Vaibhav Agrawal, vice president, research, Angel Broking told IANS.

Some reports on Monday had cited the IMD as having lowered its long-period average rainfall projection from 88 percent to 81 percent.

The news about further weakening of the monsoon would have had a negative bearing on the Reserve Bank of India’s (RBI) decision on a next phase of rate cuts.

Sector-wise, S&P BSE banking index zoomed by 651.94 points, capital goods index augmented by 478.45 points, automobile index gained by 290.14 points, metal index rose by 161.81 points and healthcare index was higher by 127.09 points.

The S&P BSE consumer durables index plunged by 126.21 points and FMCG index receded by 63.37 points.

Major Sensex gainers during Tuesday’s trade were: Gail, up 6.48 percent at Rs.295.05; Tata Steel, up 5.97 percent at Rs.228.80; BHEL, up 5.60 percent at Rs.212.20; Axis Bank, up 5.13 percent at Rs.473.65; and ICICI Bank, up 4.75 percent at Rs.261.10.

The major Sensex losers were: Hindustan Unilever, down 2.15 percent at Rs.802.45; Bharti Airtel, down 0.09 percent at Rs.346.75; ITC, down 0.08 percent at Rs.313; and Infosys, down 0.03 percent at Rs.1,059.30.

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