The Telegraph
Since 1st March, 1999
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Rupee tests 46.01, stocks hit new peak

Mumbai, July 14: The rupee almost soared above the 46-dollar mark and stocks ended at a 28-month high as the torrent of dollars continued to swamp the market.

The rupee extended its gains, fuelled by strong investment inflows, and would have touched 45.99 if its march was not halted by state-run banks that bought dollars at the behest of the Reserve Bank of India (RBI).

The currency ended at 46.05 — a new 33-month high —after having peaked at 46.01 earlier. Dealers said the rupee could breach the 46-threshold soon if PSU banks stay away.

A small section of the inter-bank forex market, however, believes gains in the days ahead could be limited by the dollar’s rebound against other global currencies

Some say it will stabilise around the 46-mark, given that it is correctly valued in real, trade-weighted terms. Others feel it could go higher as inflows from foreign institutional investors (FIIs) continue to be strong.

Foreign funds have already pumped in $ 321 million so far this month. Analysts say the State Bank of India’s plan to raise around $ 2 billion through a new deposit scheme aimed at NRIs would also favour the rupee.

Shares sizzle

The BSE sensex leapt 44.49 points to 3720.75 in a rally driven by old-economy heavyweights. Technology shares wilted under concerns arising from the impact of an appreciating rupee. The 30-share index opened at 3704.63 and moved to a high of 3726.56 before ending at 3720.75, up 1.21 per cent.

Steel, pharmaceuticals and banking were the top draws. State Bank of India flared up by Rs 9.80 to Rs 339.60, while State Bank of jumped Rs 14.05 to Rs 403.20.

The other gainers were Dr Reddy’s Labs, HPCL, Tisco, ICICI Bank and Zee Telefilms, which shot up Rs 12.85 to Rs 117.15 on speculation of a Siticable maiden offer.

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