Sensex rallies 214 points ahead of RBI rate call
MUMBAI: Stocks hit all the right notes after a long weekend and remained well above the baseline throughout the day as the Sensex on Tuesday jumped 214 points ahead of the outcome of the RBI monetary policy meet.
The Nifty too did not disappoint, which again settled above the crucial 9,800-mark.
Interest rate sensitive auto stocks in particular turned favourites on robust sales data for September amid expectations of favourable policy action from the central bank, analysts said. The decision of the six-member monetary policy committee (MPC) is due on Wednesday.
True to their form, domestic institutional investors (DIIS) carried on with buying, which saw the 30-share BSE barom- Tuesday. The industry and the government are calling for an interest rate cut to spur GDP growth, which fell to a 3-year low of 5.7 per cent in the June quarter.
The stock exchanges were shut on Monday for Gandhi Jayanti. Firm Asian leads and a higher opening of European markets reflecting a rally on Wall Street, where all three US indices scaled new records following strong economic data, made investors here bite the bait.
US manufacturing activity in September rose to its highest level in 13 years, a pointer to gradual revival of the global economy. The deadliest mass shooting in the US history in Las Vegas, however, brought in a sense of caution, traders said. MUMBAI: The rupee on Tuesday dropped by 22 paise to close at 65.50 against the resurgent dollar amid rising expectations of a rate hike by the US Federal Reserve. The rupee opened with lower at 65.65 against last weekend close of 65.28 on heavy bouts of dollar demand, despite strong equities. The domestic currency regained some lost ground at the fag-end to settle at 65.50, showing a sharp fall of 22 paise, or 0.34 per cent. Forex trading sentiment turned little shaky ahead of the RBI policy meet outcome. Increased demand for the American unit from importers and corporates along with massive capital outflows largely contributed to the rupee's weakness.