The Telegraph
Since 1st March, 1999
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Stocks claw back, rupee marches on

Mumbai, March 26: In a brilliant trapeze act today, the rupee and the sensex both swung up to clock impressive gains.

With an eye on the new financial year, investors gave a fresh thrust to the doddering BSE sensex to help it spin back into the 5500-orbit, gaining an impressive 114.50 points to 5528.94.

Keeping to the beat, the rupee gained 27 paise against the dollar — the highest in a single day over the past six years. The forex market was encouraged by the statement made by governor Y. V. Reddy that the Reserve Bank will not intervene in the markets unless it gets too volatile.

The euphoria in the global markets helped to improve sentiments here. Moreover, stocks did well on hopes of good fourth-quarter corporate results.

Gainers outnumbered losers nearly two to one on a day when the markets witnessed a high turnover with trades totalling 13.3 crore shares.

Buoyed by huge foreign fund inflows and the absence of any intervention from the RBI, the rupee galloped by 27 paise to close at a 46-month peak of Rs 44.46/48 per dollar.

Analysts said with today’s gain, the Indian currency has posted its highest weekly gain in six years. In volatile trade on the foreign exchange market today, the rupee breached key resistance levels and surpassed the Rs 44.49/50-per-dollar finish struck on May 29, 2000.

The currency opened at 44.73 per dollar and shot to an intra-day high of Rs 44.42/43. The rupee has gained over 78 paise in recent sessions. So far this fiscal, the currency has risen by over 2 per cent after an over 5 per cent gain in the previous year.

Foreign fund inflows have sharply gone up, following the mega offers that mopped up over Rs 13,000 crore from investors.

Even as the rupee gained by a huge margin against the greenback, Reddy averred that the Indian currency was fairly stable vis-a-vis other global currencies.

Pointing out that international currencies have been volatile in the recent past, Reddy said, “Volatility is not easy to define and I always said the broader line between flexibility and volatility is shifting.”

The rupee value has to be seen in the context of demand and supply in the country and the cross currency movements in the world, he said.

Mirroring the sentiments, the broader National Stock Exchange index rose 2.53 per cent at 1,747.50 points.

Oil stocks rose. However, Petronet LNG made a modest debut having slipped marginally below its issue price.

Tata Motors gained 13.25 to close at Rs 466.35. SAIL also rose sharply and ended the day at Rs 33.15 apiece. Punjab National Bank gained nearly 10 per cent to close at Rs 332.75 as investors.

Technology shares rose on the back of gains made by the Nasdaq composite index which ended up by 57.69 points. The Dow Jones industrial average also shot up by 170.50 points yesterday.

Technology shares gaining today was surprising as it is one of the sectors that will be affected by the Indian rupee gaining against the dollar.

Reliance gained 10.35 to Rs 525.45, SBI by 26.75 to 593.10, HLL by 2.65 to Rs 148.10.

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