Sensex opens 100 pts up, rupee gains after RBI norms on gold

The Indian markets opened in the green on strong global economic cues.

The BSE Sensex openedat 20263.97 up 104.85 points while theNiftygained 32.50 points at 6064.30.

Globally,Asian stocksgot off to an uninspired start on Tuesday, with Japan’s share market losing a bit of ground, while gold took a breather after its biggest one-day gain in over a year.The S&P 500 notched a third consecutive record closing high on Monday and major indexes rose, though disappointing McDonald’s earnings kept the Dow from making significant gains.

The rupee opened stronger today after the RBI further tightened gold import rules.In the currency market, the rupee is trading at 59.64/USD.

Jayesh Mehta, Bank of America said, “The central bank has now taken fiscal measures to stem the rupee volatility and to address fiscal concerns by putting further restriction ongoldimports. However, month-end dollar demand continues from the OMCs. The range for the day is seen between 59.30-59.70/USD.”

On Monday, RBI lifted financing restriction on gold and put quantitative restrictions. The central bank says importers have to park at least 20 percent of imported gold for exports. Data suggests gold imports could fall by as much as 63 percent. However, the jewellery sector is divided in its reactions. They feel exports to a tepid overseas market would be tough.

Arnab Das of Roubini Global Economics believes the economic scenario in the emerging markets (EMs), especially India does not look good for the next 6-12 months . Weak rupee and large outflows from the economy are affecting macro policy and macro performances, Das told CNBC-TV18. The market will see a strong headwind as a result, he adds.

On the improving conditions in the US economy and the possibility of tapering of quantitative easing, Das says, “The tide is turning a bit against EMs in favour of the US and also US relative to other developed countries.”

Stocks in news:

L&T opened 0.21 percent down after it reportedQ1 (April-June) net profit which fell higher-than-expected 12.5 percent year-on-year to Rs 756 crore.

Titan Industries shares are trading down 1.4 percent after the Reserve Bank of India moved to tighten gold imports again. Gitanjali Gems is also down almost 5 percent.

BSE bankex starts the day on a good note, at the top of the sectoral pack with gains of 1.1 percent.Bank of Baroda and Union Bank rise more than 2 percent - top components in the BSE bankex.