Mumbai: Continuing its rise, the benchmark S&P BSE Sensex on Friday gained another 206 points to end at a one-week high as the rupee recovered after assurances from the government and the Reserve Bank. The stock and currency markets got a boost after Finance Minister P Chidambaram on Thursday said there is no need for panic and that revival and encouragement of growth will remain the government's focus.
Capital goods and bank stocks led 12 of the 13 sectoral indices higher, while the realty index finished lower. The 30-share barometer initially touched a low of 18,210.75 on hesitancy in Asian stocks following the fall on Wall Street on Thursday. It recovered to settle at 18,519.44, a rise of 206.50 points or 1.13 per cent.
The rupee appreciated, ending six days of losses. After bouncing back from an all-time intra-day low of 65.56 yesterday, the local currency traded at 64.07 in late afternoon deals. "Markets have pulled back on increasing optimism that the rupee has reached the bottom and may not fall from these levels," said Dipen Shah, head of Private Client Group Research at Kotak Securities. "We believe that if the government or RBI were to take steps to stabilise and strengthen the rupee, it would be a big boost to sentiment."
The 50-issue CNX Nifty of the NSE also improved further by 63.30 points or 1.17 pct to 5,471.75. BHEL, with an 8.1 per cent rise, led gainers on the Sensex, followed by Tata Power, Jindal Steel and Tata Steel. Chidambaram said efforts are on to increase coal output, remove uncertainty of coal imports, restart iron ore mining and enhance capacity of fertiliser plants to boost growth.
India's efforts to curb imports, improve exports and attract greater remittances may help it almost fully fund its current account deficit this fiscal and also help the rupee recover to 61-level against the dollar in the next 6-12 months, Barclays said in a report on Friday.
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