Sensex zooms 685 pts, rupee rises 161 paise
The rupee surged 161 paise to 61.77 against the dollar on Thursday, its highest level since August 16, and the Sensex zoomed 685 points or 3.4% to 20,646.64, the highest it has reached since November 11, 2010. HT reports.business Updated: Sep 20, 2013 00:00 IST
The rupee surged 161 paise to 61.77 against the dollar on Thursday, its highest level since August 16, and the Sensex zoomed 685 points or 3.4% to 20,646.64, the highest it has reached since November 11, 2010, after the US Federal Reserve surprised the markets by retaining its $85-billion monthly bond buying programme.
“In the short-term (about a month), the rupee is likely to strengthen to 60 per dollar,” said Brijen Puri, head of emerging markets, JP Morgan India. “For it to strengthen over the medium term, we need more reforms-oriented announcements from the government to push growth and contain inflation,” he said.
The rupee started strong at 61.70 to the dollar from the previous close of 63.38 and moved between 61.64 and 62.10 before ending at 61.77, showing a gain of 2.5%. Thursday’s gain was the biggest since August 29, when it rose 225 paise or 3.3%.
“We now expect the RBI governor to roll back some of the recent measures to curb liquidity,” said Amar Ambani, head of research at India Infoline. “However, we see no change in repo rates.”
On the stock market, banking stocks were the main gainers. Yes Bank (up 22.54%), Indian Bank (12.41%) and Union Bank (9.97%) led the charts.
“For the next two months at least, I feel we are out of the woods,” said Sachin Shah, Fund Manager Emkay.
“We are not in a bull run; there are still issues that can affect the environment,” said Tirthankar Patnaik, chief economist, Religare Capital Markets. “I think the stock market could remain range-bound till there is an improvement in the macro-economic environment.”