June 26 2019
Rupee recovers against dollar
21 August 2018

Sensex closes at new high

Indian benchmark equity indices rose to new highs on Monday as investor sentiments were lifted on account of a positive trend across most leading Asian markets and a recovery in the rupee against the dollar.

The 30-share Sensex gained 330.87 points or 0.87% to close at a new high of 38,278.75 with 23 of its constituents gaining ground. Auto and metal majors like Tata Steel, Tata Motors, Bajaj Auto and Vedanta were among the top gainers of the day.

Infosys, meanwhile, was the first performer among the Sensex pack on Monday shedding over 3% or ₹46.15 to close at ₹1,385.20 after the company's chief financial officer M.D. Ranganath resigned on Saturday.

The broader Nifty breached the 11,500 mark for the first time ever, gaining 81 points to close at 11,551.75.

Among other major Asian markets, Hang Seng gained 385 points while the benchmark indices of South Korea, Indonesia and Taiwan also gained ground amid hopes that U.S. and China would soon resolve trade disputes. Nikkei, however lost marginal ground on Monday.

Back in India, the overall market breadth also remained slightly on the stronger side with 1,437 advances against 1,307 declines. The broader BSE Midcap gained over 1% while the BSE Smallcap also moved marginally up on Monday.

Mid-cap and small- cap stocks have been gaining ground in the last few trading sessions.

“Despite the correction this year, we still believe that mid-cap stocks are expensive,” said Mukul Kochhar, Head Institutional Sales, Investec Capital Services.

“The only difference now (versus a few months back) is that politics looks more stable – prospects of an Opposition coalition are looking a little shaky,” he said, while adding that rupee remains at risk and that could help technology companies.

The rupee opened stronger on Monday compared to its previous close of 70.16 a dollar and appreciated 0.47% or 33 paise to close the day at 69.83 a dollar.

Incidentally, the rupee has depreciated around 9% in 2018 and is the worst performing currency in Asia. The rupee, along with other emerging-market currencies have been impacted due to global monetary tightening and, more recently, contagion from the Turkey crisis.

Rating agency Fitch said the impact of currency weakness on India’s sovereign credit profile is likely to be limited by relatively strong external finances, especially the low level of external debt.

“Currency depreciation could nevertheless add to existing pressures in the corporate and banking sectors,” it said.



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