Sen­sex surges 732 points; ru­pee rises to 73.57

Gulf Times Business - - BUSINESS -

In­dia’s bench­mark in­dex re­bounded, re­coup­ing a year-to-date ad­vance, as some in­vestors judged Thurs­day’s sell-off as ex­ces­sive.

The Sen­sex rose 2.15%, or 732.43 points, to 34,733.58 yes­ter­day. Year to date, it gained 2%. The gauge had erased its year-to-date gain on Thurs­day, de­spite post­ing its best weekly per­for­mance since July.

Yes­ter­day, all ex­cept two of 19 sec­tor sub-in­dexes compiled by the BSE ended higher, led by au­tomak­ers and en­ergy com­pa­nies as the price of crude oil headed for the big­gest weekly de­cline since May. Tata Con­sul­tancy Ser­vices, the na­tion’s big­gest IT com­pany, was the big­gest lag­gard af­ter re­port­ing earn­ings.

“Some stocks are get­ting at­trac­tive,” af­ter re­cent de­clines, Paras Bothra, pres­i­dent of re­search at Ashika Stock Broking said. “How­ever, in­vestors re­main cau­tious and are seek­ing more clar­ity on the out­look for cor­po­rate earn­ings and eco­nomic growth.”

The Sen­sex’s rel­a­tive strength in­dex dropped back be­low a thresh­old Thurs­day in­di­cat­ing po­ten­tial over­selling, af­ter the gauge fell last week, slid­ing more than 10% from a peak in Au­gust.

In­dian eq­ui­ties – Asia’s top per­form­ers un­til re­cently – have re­treated amid a flurry of bad news, from surg­ing oil prices and a slump­ing ru­pee to a rout in non-bank lenders fol­low­ing de­faults at an in­fras­truc­ture fi­nancier. Fur­ther ero­sion may af­fect flows to mu­tual funds, which have re­peat­edly buffered the na­tion’s $2tn mar­ket against the riskoff mood.

Mean­while the ru­pee ended stronger against the US dollar for the third ses­sion against yes­ter­day as eq­ui­ties gained due to a fall in global crude oil prices. All eyes are on con­sumer price in­fla­tion and in­dex of in­dus­trial pro­duc­tion data due later. The home cur­rency ended at 73.57 a dollar, up 0.75% from Thurs­day’s close of 74.13. The cur­rency opened at 73.80 a dollar and touched an in­tra-day high of 73.52. The 10-year g-sec closed at 7.984% from its pre­vi­ous close of 8.031%. Bond yields and prices move in op­po­site di­rec­tions.

Brent crude oil, which went past $86 a bar­rel for the first time in nearly four years last week, is cur­rently trad­ing at a three-week low just above $80. The in­ter­na­tional bench­mark lost nearly 5.6% in the last two days.

So far this year, the ru­pee has de­clined 13%, while for­eign in­vestors have sold $3.84bn and $7.92bn in the eq­uity and debt mar­kets, re­spec­tively. Asian cur­ren­cies were trad­ing higher af­ter US in­fla­tion mod­er­ated and Pres­i­dent Don­ald Trump was said to be plan­ning a meet­ing with Chi­nese Pres­i­dent Xi to defuse trade ten­sion.

South Korean won rose 0.87%, Tai­wan dollar 0.62%, In­done­sian ru­piah 0.24%, Philip­pines peso 0.19%, Sin­ga­pore dollar 0.17%, Malaysian ring­git 0.07%. How­ever, China Off­shore spot was down 0.32%, China ren­minbi 0.16% and Ja­panese yen 0.12%. The dollar in­dex, which mea­sures the US cur­rency’s strength against ma­jor cur­ren­cies, was trad­ing at 94.994, down 0.02% from its pre­vi­ous close of 95.017.

The ru­pee closed at 73.57 a dollar yes­ter­day, up 0.75% from Thurs­day’s close of 74.13

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