Reform hopes lift stocks from day's lows, Sensex ends flat
Recovering from early losses of over 220 points, the benchmark S&P BSE Sensex today ended 3 points lower at 19,345.70, as the rupee came off a near-record low and the government announced plans for further liberalisation.
Realty, FMCG, banking and power stocks declined, while metal, teck, refinery, IT and consumer durable shares gained.
The 30-share Sensex resumed lower and fell to a one-month low of 19,126.82 as the rupee fell below the 61 level and Asian stocks weakened. The index wiped out most of the losses and closed at 19,345.70, a fall of 2.64 points.
The broader CNX Nifty index on the NSE declined 13.05 points, or 0.23 %, to 5,742.00. The SX40 index on the MCX-SX fell 0.44 %.
Finance Minister P Chidambaram today said the FDI policy would be liberalised further and public sector undertakings encouraged to raise funds from overseas.
The government is considering raising import duty on non-essential, luxury items and promoting exports to contain the current account deficit. Chidambaram said he was confident the economy would grow 5.5 to 6 % in the current fiscal, up from 5 % in the previous fiscal.
Chidambaram's comments came a day after the RBI left key policy rates unchanged and asked the government to take urgent steps to contain the CAD. The central bank cut its GDP growth estimate to 5.5 % from 5.7 %.
The RBI also said liquidity tightening steps taken to support the rupee would be rolled back in a calibrated manner as stability is restored to the foreign exchange market.
The rupee, however, plunged past 61 per dollar, just shy of the all-time low of 61.21, before trading at 60.88 when the stock market closed.
"Benchmark indices opened gap down and continued to trade in a narrow range for most of the day as rupee traded weak below 61," said Amar Ambani, head of research at IIFL.
Telecom giant Bharti Airtel was the top gainer on the Sensex, climbing 7.3 %. The company posted a 9.6 % fall in first-quarter net profit. ICICI Bank reported a 25 % growth in Q1 standalone net profit to Rs 2,274.21 crore. The stock fell 1.86 %.