Date: |
02-09-2014
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Subject: |
Rupee strengthens to 60.46 per dollar tracking stock market gains
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The Indian rupee was trading higher against the dollar in the afternoon trade, tracking gains in the local equities markets.At 2.10pm, the home currency was trading at 60.46 a dollar, up 0.08% from its previous close of 60.52. BSE’s equity benchmark S&P BSE Sensex was trading at 26,858.48 points, up 0.83%.
The local unit opened at 60.51 per dollar and strengthened to 60.43 in the afternoon. In intra-day trade, the 30-share bellwether S&P BSE Sensex touched an all-time high of 26,869.92, while the National Stock Exchange’s broader 50-share Nifty hit a high of 8,028.05.
Asian currencies showed a mixed trend. The Philippines peso was up 0.25%, South Korean won gained 0.07% and China Offshore rose 0.07%, while Indonesian rupiah fell 0.17%, and Thai baht slipped 0.12%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 82.704, down 0.05% from the previous close of 82.748.
Since the beginning of this year, the rupee has gained 2.21%, while foreign institutional investors have bought $12.99 billion from local equity markets.
The yield on India’s 10-year benchmark bond was trading at 8.556%, compared with its Thursday’s close of 8.563%. Bond yields and prices move in opposite directions. On Friday, markets were closed on account of Ganesh Chaturthi.
On Friday, the government released gross domestic product (GDP) as well as fiscal deficit data. GDP grew at 5.7% in the June quarter—the fastest in more than two years and better than the 4.6% increase in the preceding quarter. The GDP data was driven by strong industrial recovery. Manufacturing activity grew 3.5%, while construction advanced 4.8%—the first clear signs that the Indian economy is on a recovery track.
According to the data released by the Controller General of Accounts on Friday, fiscal deficit for the April-July period stood at Rs.3.25 trillion, 61.2% of the full-year budget estimate of Rs.5.31 trillion. The fiscal deficit—total receipts over total expenditure—was 62.8% of the budget estimate during the same period in the previous financial year.
The HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, fell to 52.4 in August from 53 in July, but chalked up its tenth month above the 50 mark that divides growth from contraction. The Manufacturing PMI had increased to 53 in July, from 51.50 in June.
A monthly meeting of the European Central Bank (ECB) is scheduled for 4 September, and there are expectations that the ECB will announce quantitative easing in the coming months to strengthen growth in the euro zone, which may boost market sentiment.
Source:- livemint.com