Sensex surges 283 points on govt steps to check rupee slide
Mumbai: The benchmark S&P BSE Sensex on Tuesday rose by 283 points, its best daily gain in a month, on optimism about the rupee after the government took more steps to curb the burgeoning current account deficit.
Realty, bank and auto stocks led the gains amid strong global cues coupled with capital inflows.
The 30-share Sensex resumed lower and dipped to 18,864.81, triggered by weak June industrial output data released after trading hours yesterday. Helped by value-buying, the index recovered to settle at 19,229.84, a gain of 282.86 points, or 1.49 percent.
On July 12, the Sensex had risen by 282.41 points.
The 50-share Nifty on the National Stock Exchange firmed up by 86.90 points, or 1.55 percent, to a one-week high of 5,699.30. The SX40 index on the MCX-SX added 149.2 points, or 1.33 percent, at 11,408.14.
The Index of Industrial Production for June contracted 2.2 percent, while retail inflation was slightly lower at 9.64 percent in July, from 9.87 in the previous month.
"This economic slowdown, along with easing inflation, is triggering hopes for rate cuts in near term. Rate-sensitive stocks were surging high in today's trade," said Rakesh Goyal, senior vice president at Bonanza Portfolio Ltd.
Finance Minister P Chidambaram yesterday announced a slew of measures, including easier overseas borrowing norms, to fetch an additional USD 11 billion and check the CAD. As part of those steps, the government today increased import duty on gold, silver and platinum to 10 percent.
The rupee recovered to 61.17 against the dollar, compared with yesterday's close of 61.27.
Of the 13 sectoral indices, 11 closed with gains. Consumer durables and metal indices fell.
Asian stock markets ended higher, led by Japanese shares.
The yen eased following a report that Prime Minister Shinzo Abe is considering a corporate tax cut as a way to offset the impact of a planned two-stage increase in sales tax.
Key indices in China, Hong Kong, Singapore, South Korea, Japan and Taiwan firmed up.
European markets were higher in early trade for the fourth straight day, with investors awaiting the latest report on German business confidence and US retail sales later in the day.
In the domestic market, 25 Sensex shares closed with gains, led by NTPC (4.01 percent), Tata Motors (3.61 percent), ICICI Bank (3.1 percent), HDFC Bank (3.06 percent) and Bajaj Auto (2.91 percent).
The market breadth remained positive with 1,444 stocks gaining and 899 ending lower. Total turnover rose to Rs 1,963.83 crore from Rs 1,681.01 crore yesterday.
Foreign institutional investors bought shares worth a net Rs 408.35 crore yesterday, as per provisional data from the stock exchanges.