Sensex jumps 382 pts after signs of US stimulus, rupee woes stay

  • HT Correspondent, Hindustan Times, Mumbai
  • |
  • Updated: Jul 12, 2013 03:35 IST

The BSE Sensex on Thursday surged 382 points, or 2%, to close at a six-week high of 19,676 as stocks staged a broad recovery from recent falls on hopes that the US monetary stimulus would not end as early as feared.

But a threat to the rupee and prospects of high inflation hung in the air.

Investors were richer by nearly R1,00,000 crore as overall 1,358 stocks rose while 974 declined on the BSE platform.

Blue chips led the market, with ITC gaining 2.3% while HDFC Bank ending up 3.6%. Software giant Infosys gained 1.1% a day ahead of its April-June earnings. http://www.hindustantimes.com/Images/Popup/2013/7/12_07_13-buss-03.jpg

The broader Nifty of the National Stock Exchange also rose 118 points, or 2%, to 5,935.

Federal Reserve chairman Ben Bernanke on Wednesday said the US central bank would continue to pursue an accommodative monetary policy as inflation remained low and unemployment rate might understate the weakness of the labour market.

“Sentiment turned bullish after Bernanke said the Fed will continue with easy-money policy 'for the foreseeable future’” said Motilal Oswal, CMD, Motilal Oswal Financial Services.

However the rupee needs to be watched. “Any further instability will be taken very negatively,” said Gautam Trivedi, India head for equities, Religare Capital Markets.

“Markets have closed at a month’s high and that is a sign that it is shrugging off the negative news,”  said Sahil Kapoor, AVP, Edelweiss Financial Services.

Going forward, Infosys’ second-quarter earnings data, inflation figures and reform measures undertaken by the government are likely to move markets, analysts said.

 

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