Indian rupee hits six-and-a-half month low
Key equity indices close in green breaking a seven-day-long losing streak
MUMBAI: The Indian rupee has slipped further and touched a fresh six and a half month low of 65.88 against the US dollar that gained clout overseas on talk of a US rate hike and the prospect of monetary stimulus pullout.
On Thursday, the rupee opened lower by 11 paise at 65.82 per dollar and closed at $65.76 against the previous day’s close of 65.71.
The dollar rose to a more than one-month high against a basket of currencies, as optimism about US fiscal reforms boosted sentiment in favour of the greenback.
Meanwhile, breaking a sevenday-long losing streak, key Indian equity indices on Thursday closed in the green on the back of positive European markets and short covering in banking, metals and healthcare stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) rose by 22.55 points or 0.23 per cent to close at 9,758.30 points.
The 30-scrip Sensitive Index of the BSE, which opened at 31,216.36 points, closed at 31,282.48 points — up 122.67 points, or 0.39 per cent.
The Sensex touched a high of 31,340.91 points and a low of 31,081.83 points during intra-day trade. The BSE market breadth was bullish — with 1,537 advances and 976 declines. On Wednesday, the benchmark indices tumbled for the seventh consecutive session and closed deep in the red, as caution ahead of futures and options (F&O) expiry, coupled with a weak rupee, hampered investors’ risk-taking appetite.
The Sensex closed at 31,159.81 points — down 439.95 points, or 1.39 per cent, while the Nifty fell by 135.75 points, or 1.38 per cent, to close at 9,735.75 points.
Volatility was induced in the markets intra-day on September derivatives expiry as investors booked profits in consumer durables, capital goods, and oil and gas stocks.
WGC ON GOLD PRICING
With the Indian government pushing for transparency in governance and having an appetite for reform, it is time for introduction of spot exchange for gold, the World Gold Council (WGC) said in New Delhi on Thursday. The WGC is a market development organisation for the gold industry.
In a report “A gold spot exchange for India: Delivering structural reforms”, released on Thursday, WGC said a spot exchange can play a key role in standardisation of bullion in the Indian market and improve trust and quality of the yellow metal sold in India.
According to the report, a spot exchange can create a transparent price discovery mechanism and the traded price can also be used as the “India reference” price. The exchange can enable formalisation of the Indian gold market which in turn would improve transparency and tax compliance.
“The exchange will also support development of the domestic refining and gold scrap market and stabilise the simpact of gold on the Current Account Deficit (CAD),” the WGC said.
According to WGC, a spot exchange for gold would help industry players to source gold directly eliminating the intermediaries and also help financial institutions to launch gold backed products.
The WGC said India’s annual demand for gold is around 800-900 ton and second only to China in the world.