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Yuan effect: Sensex, rupee surge

business Updated: Jun 21, 2010 22:47 IST

Agencies
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Stock market benchmark Sensex on Monday rallied 306 points to settle at its highest level in more than two months, buoyed by the end of the regulatory dispute over ULIPs and more importantly China’s move to make the yuan more flexible.

The 30-share barometer of the Bombay Stock Exchange, which fell marginally on Friday following a seven-day winning streak, recovered smartly on aggressive purchasing in metal and financial stocks to finish at 17,876.55, up 305.73 points, or 1.74 per cent.

This is the best closing of the Sensex since April 9. The bellwether opened on a strong note, tracking firm global cues, and never looked back. During the session, the Sensex breached the 17,900 level, but ended slightly below that mark.

Likewise, the Nifty Index of the National Stock Exchange ended 1.72 per cent higher at 5,353.30 points.

Meanwhile, the US dollar ended sharply cheaper against the rupee at Rs 45.75/76 per dollar and the pound sterling also finished lower at Rs 67.91/93 per pound at the close of the Interbank Foreign Exchange (Forex) market here.

In Asia, Hong Kong’s Hang Seng Index gained over 3 per cent and was the best performer. China’s Shanghai index surged by 2.90 per cent and Japan’s Nikkei jumped 2.43 per cent. At mid-session, European markets were also higher.

“Market confidence across the world was boosted following China’s announcement to make the yuan more flexible,” Delhi-based brokerage Bonanza Portfolio’s Assistant Vice-President (Research-Equity) Avinash Gupta said.

“Sentiment on the Dalal Street was also up as uncertainty over the regulation of ULIPs is now over. More money is likely to come into the market in coming days,” Gupta said.