Sensex hits 3-year high, banking stocks surge
The benchmark BSE Sensex hit 3-year high of 20,831 points at 2.27 pm on Friday surging 415 points or 2.04% on hopes that US Fed would not taper the $ 85 billion a month-bond buying programme in 2014 which would ensure sustained fund flow into the equity markets.business Updated: Oct 18, 2013 15:41 IST
The benchmark BSE Sensex hit 3-year high of 20,831 points at 2.27 pm on Friday surging 415 points or 2.04% on hopes that US Fed would not taper the $ 85 billion a month-bond buying programme in 2014 which would ensure sustained fund flow into the equity markets.
“The current rally is driven by a host of factors. Other than increased liquidity, banking stocks rose on as RBI is expected to take certain positive measures,” said Deven Choksey, MD KR Choksey Securities.
“I think Reliance Industries has lent great support to the current rally. Positive news on Reliance such as increased margin, capacity addition and growth in shale gas business abroad and retail business in India triggered upswing in RIL stocks,” said Choksey.
As of 2.14 pm 28 out of 30 Sensex stocks were up, metal stocks Sesa Goa and Tata Steel being the top gainers. Sesa Goa rose 7.47% and Tata Steel 5.8% as China, the biggest consumer of metals, reported positive GDP numbers after two tepid quarters. “Besides China GDP numbers, improvement of consumption in Europe too helped metal stocks,” said an analyst with IDFC Securities.
Meanwhile, rupee which has been on an upswing for the past six weeks today breached an important milestone of Rs 61 against US dollar. The rupee strengthened to Rs 60.9 before climbing down to Rs 61.26 by 2.27 pm. “The general view that US Fed won’t tighten its monitory policy strengthened rupee too besides lowering current account deficit,” said Naveen Mathur, associate director, Angel Broking.
“However there are no fundamental changes and we may see rupee holding up at 61-62 levels,” said Mathur.