STATESMAN NEWS SERVICE
Mumbai, 2 September
Short covering coupled with encouraging global cues helped equity indices and the partially convertible rupee to continue rallying for the third session in a row.
Ignoring the domestic economic woes and a slew of negative projections issued earlier in the day by brokerages and investment banks, the S&P Bombay Stock Exchange Sensitive Index today closed adding 266.41 points or up 1.43 per cent at 18,886.13 points.
The CNX Nifty of the National Stock Exchange gained 78.95 points or 1.44 per cent to end at 5,550.75 points.
The rupee, which is trading with much ease against the American dollar since the Reserve Bank of India has opened a separate window for oil marketing companies or OMCs to buy their dollar requirement, opened weak on the inter-bank foreign exchange at 66.11/$ compared with Friday’s closing of 65.70/$.
It slipped 45 paise to a low 66.15 before staging a recovery that could not be sustained as dealers say falling factory activity at four-year low put the currency once again under stress. It closed at 66/$, down 30 paise or 0.4566 per cent.
The Sensex and Nifty buoyed in line with other Asian markets following robust manufacturing data from China after two quarters of slowdown. Besides, the markets across the globe heaved a sigh of relief as the risk of the United States-led attack on Syria has been put off under mounting global pressure, particularly after the British Parliament rejected that country’s involvement in another war.
This allowed domestic traders to indulge in short covering. The rally was sustained in the later part of the day tracking strong start on European bourses where FTSE, CAC and DAX traded more than 1.5 per cent up.
Earlier in the morning, Nikkei of Tokyo closed 1.37 per cent up at 13,572.92 points, Hong Kong’s Hang Seng rose 2.04 per cent to 22,175.34 points and Singapore’s Strait Times was up 0.88 per cent.
The Sensex rally was led by Tata Steel. The stock has been rising phenomenally since 6 August. Today it closed at Rs 289.45, up 5.54 per cent. Analysts say the share is shooting up on possible increase in demand for steel in the post-monsoon construction activity. This would, they say, push up the steel price which the company has been insisting upon.
Other gainers in the Sensex included Maruti Suzuki, RIL and ICICI Bank. In Sensex, 23 stocks ended up and seven were down. In Nifty the ratio was 35:15.