It turned out to be stable session at Dalal Street today as benchmark equity indices gaining ground steadily to end near day’s high.
Bourses dipped in red in early morning deals, giving an impression that it would be yet another down session of performance, but soon gathered momentum. By the close of trade, Sensex and Nifty, adding over half a percent concluded past 18,750 and 5,550 psychological levels respectively. While the Sensex closed up 0.67 percent at 18789, the Nifty ended up 0.84 percent at 5565.
Hindalco, Tata Steel, Cipla, Maruti Suzuki, Bharti Airtel, Sterlite, M&M, HDFC, Coal India, Jindal Steel and HDFC Bank are up, whereas Sun Pharma, SBI, Wipro, Dr Reddy's Lab, RIL, HUL and Gail are showing some weakness.
The rupee too rebounded slightly and was trading at 60.80 against the USD sfter ending at a record low of 61.30 on Wednesday.
However the rupee weakness poses a significant threat to India's stock markets as it could prompt foreign investors to flee domestic stocks.
"When an emerging market currency does not respond positively to policy liquidity tightening, the market is in deep trouble. Therefore, further price weakness in the currency could plausibly drive further weakness in the equity market," said Nicholas Ferres, investment director, global asset allocation at Eastspring Investments, referring to the Reserve Bank of India's recent measures to tighten liquidity in order to make it more difficult to speculate against the currency, in an interview with CNBC- TV18.
Even Morgan Stanley today said RBI's recent measures have made Indian shares much more vulnerable to global cues, especially the expected tapering of US monetary stimulus.
Morgan Stanley cuts its bear-case scenario index target for the BSE Sensex to 16,200 from 17,912 while raising the probability of such a scenario to 35 percent from 20 percent.
US investment bank Goldman Sachs last week downgraded its rating on Indian equities to underweight from neutral citing, concerns around the deteriorating macroeconomic environment, weakening earnings and the risk of foreign selling.
Meanwhile, the finance ministry is expected to announce a major package next week as part of an all-out effort to curtail the widening current account deficit (CAD), comprising a combination of import compression, long-term external commercial borrowing and foreign capital flow management.
Stocks in news
Ranbaxy Laboratories surged 27.6 percent after higher US quarterly sales eased some of the recent regulatory concerns about a key market for the drug maker, while a recovery in the rupee also supported the broader market. Shares in Ranbaxy Laboratories provisionally rose 27.6 percent after the drugmaker posted better-than-expected April-June sales at its US unit.
Jet Airways reported net loss 3.55 billion for the quarter ended June 30, 2013. The scrip was 2.84% down on BSE but ended in the green, up 0.28 percent.
Tata Motors ended down 0.05 percent as four brokerages scaled back their 12-month target prices a bit to factor in slowdown in the domestic business.