Rajan effect sends Sensex soaring 412 points to 3-week high - The New Indian Express

Rajan effect sends Sensex soaring 412 points to 3-week high

Published: 05th September 2013 06:31 PM

Last Updated: 05th September 2013 06:32 PM

The benchmark S&P BSE Sensex soared 412 points to a three-week high on Thursday after new RBI Governor Raghuram Rajan whetted the appetite of investors with a spate of measures including steps to boost the rupee and revive economic growth.

The gains were led by banking, realty, consumer durable and PSU stocks, while information technology stocks declined.

The rupee also gained on the back of Rajan's announcements and went up to 65.5 against the dollar in intra-day trade from Wednesday’s close of 67.07.

The index opened 290 points higher than Wednesday’s close and gained as much as 550 points to the day's high of 19,117.52 before settling at 18,979.76, a rise of 412.21 points or 2.22 per cent.

The Sensex was at the highest level since August 14, when it closed at 19,367.59. On Wednesday, the Sensex had gained 333 points on investor optimism about the new RBI Governor.

Soon after taking over as the 23rd Governor of the Reserve Bank of India, Rajan announced plans to revise and strengthen the monetary policy framework and liberalise the markets as well as curbs on investment and position-taking.

He said steps would be taken to strengthen financial infrastructure and attract capital inflows and stressed the need for faster, broad based, inclusive growth.

"The RBI governor's enthusiastic words seemed to calm the markets," said Raghu Kumar, co-founder of RKSV Securities. "Mr Rajan emphasised that the RBI's primary role is to keep inflation levels at bay and to keep stability in the markets."

The banking sector index rose 9.3 per cent after Rajan raised the overseas borrowing cap for banks and said there is a need to cut investments by lenders in government securities.

He said banks would soon be free to open branches.

The National Stock Exchange index Nifty shot up 144.85 points, or 2.66 per cent to 5,592.95. The MCX-SX's SX-40 ended at 11,208.21, up 241.39 points.

The passage of the Pension Bill in the Lok Sabha Wednesday raised hopes of more reforms, experts said.

Asian stocks ended higher following overnight gains on Wall Street. Key indices in Hong Kong, Japan, South Korea, Singapore and Taiwan rose while the Shanghai Composite fell.

European stocks traded mixed ahead of policy decisions from the European Central Bank and the Bank of England. Key indices in France and Germany eased while UK's FTSE was up.

In the domestic market, 18 Sensex shares advanced, led by State Bank of India (9.74 pc), ICICI Bank (9.2 pc), BHEL (8.2 pc), HDFC Bank (7.53 pc) and Coal India (7.02 pc).

ICICI Bank, HDFC Bank and SBI together contributed about 245 points to the gains in the Sensex.

The losers on the index included Sesa Goa, which dropped 4.26 pc, followed by TCS 3.37 pc, Infosys 3.32 pc, Wipro 2.74 pc and Gail India 1.54 pc.

Among sectoral indices, S&P BSE-Bankex rose 9.3 pc, S&P BSE-Realty 5.41 pc, S&P BSE-Consumer Durables 4.54 pc, S&P BSE-PSU 4.5 pc and S&P BSE-Capital Goods 3.48 pc.

The market breadth was positive as 1,487 stocks gained, 849 declined and 138 ruled steady. Total turnover improved to Rs 2,062.18 crore from Rs 1,938.81 crore on Wednesday.


Also read:

Sensex up 412 points at over 3 week high on RBI steps, reform hopes


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