Sensex surges 176 points, breaches 19,000 mark; Rupee down

The Indian equity markets surged and closed 176 points higher after a sluggish few days.

Sensex closed at 19041, up 0.93 percent and the Nifty closed at 5748, up 0.77 percent nudged by global cues.

Finance Minister P Chidambaram on Monday reiterated the government’s commitment to additional economic reforms during a news conference in Tokyo, but investors remained concerned about political stability after the withdrawal of a key ally from the ruling coalition last month.

[caption id=“attachment_682938” align=“alignleft” width=“380”] Government will continue to argue for lowering of interest rates by Reserve Bank. Reuters[/caption]

Government will continue to argue for lowering of interest rates by Reserve Bank in the backdrop of softening of headline inflation and the need to promote economic growth, Finance Minister P Chidambaram today.“The RBI has to weigh the fact that headline inflation has come down yet consumer price inflation is sticky…it has to keep Current Account Deficit in mind before it lowers interest rate,” he said.

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Rupee was down at 54.34/35 per dollar versus its close of 54.28/29 on Thursday on concerns about the record current account deficit but bunched inflows are expected to keep losses in check, said dealers.

Commenting on the volatile rupee, ICICI Direct in its research report said that it expects the currency to be choppy. “While the current environment does not support strong gains in rupee, losses will also be contained by prompt policy action. Thus, we expect rupee to be choppy but remain range bound in the coming year, trading largely in the 53.0 - 55.0 band. The confluence of both global and domestic factors has caused increased volatility in the rupee, making it difficult for the currency to conform to one direction for long. Recently rupee received a double blow from a cautious RBI and political uncertainty, derailing it from its appreciation trajectory. Further, global markets went into a risk-off mode on the Cyprus bailout deal,” according to the report.

Stocks in news

Sterlite Industries closed up 4 percent even after the Supreme Court today asked Sterlite Industries, a subsidiary of UK-based Vedanta Group, to pay Rs 100 crore as compensation for polluting environment through its copper smelting plant in Tamil Nadu but refused to direct its closure**.**

Shares in United Spirits closed 2 percent down on reports that banks have started selling stocks in India’s biggest alcohol maker to recover Kingfisher Airlines debt, dealers say.

SKS Microfinance closed up 4 percent after the country’s lone-listed microlender said it has raised Rs.226 crore through two securitization transactions.

Larsen & Toubro closed up 2 percent rose after the company said its construction division secured new orders valued over 37 billion rupees across various business segments in March.

Sun Pharma closed up 5 percent Shares in India’s Sun Pharmaceutical Industries Ltd gain 4 percent after Nomura said URL Pharma, the unit it acquired from Takeda Pharmaceutical, has significantly raised prices of a drug, dealers say.

Reliance Communications closed up 11 percent after Reliance Jio Infocom, Mukesh-Ambani’s 4G arm, has inked a Rs 1,200 crore pact to use fibre optics network of Anil Ambani’s Reliance Communications, following which shares of RCom shot up 14 percent.

Auto stocks including Maruti Suzuki, Tata Motors and Mahindra and Mahindra closed with gains. “Auto volumes in the month of March 2013 were not very different from the trend that had been witnessed in the past few months. Overall weak economic growth continues to keep demand sentiment subdued,” said Arun Agarwal, Auto Analyst, Kotak Securities.

With inputs from Agencies.