Rupee logs its biggest drop in nearly three weeks
The benchmark S&P BSE Sensex on Monday surpassed the 26000-mark for the first time ever.
The Sensex closed at 26100.08 with a gain of 138.02 points. A broader BSE-100 gained 0.35 per cent. While the BSE’s mid-cap stocks gained 0.12 per cent, small-cap stocks were up by 0.60 per cent.
On the National Stock Exchange (NSE), the 50-share Nifty gained 35.55 points to close at 7787.15.
“Markets have been generally maintaining their bullish undertone while waiting for the Union Budget. Though we saw some selling and profit-booking in banking and oil and gas stocks, the index remained upbeat due to positive movements in information technology and pharmaceuticals,” said Sudip Bandyopadhyay, Managing Director and CEO, Destimoney Securities.
According to him, tomorrow’s [Tuesday’s] railway budget will set the tone for the market for the next two days till the budget proposals are announced on July 10.
Global markets have been, by and large, buoyant with oil prices easing and liquidity remaining comfortable. “Last week’s announcement of positive non-farm pay-roll data has significantly improved sentiment in the U.S. and helped FIIs remain bullish on risk,” Mr. Bandyopadhyay added.
“Investor interest in Indian mid-caps has exploded driven by strong inflows into domestic mid-cap mutual funds. After a span of three years, local mutual funds are finally seeing net inflows,” said Gautam Trivedi, Managing Director & Head of Equities, Religare Capital Markets.
Meanwhile, the rupee slipped 29 paise, logging its biggest drop in nearly three weeks, to end at 60.01 versus the dollar on rising demand for the U.S. currency from custodian banks.
The rupee fell despite the stock benchmark Sensex ending above the 26000-level.
At the inter-bank foreign exchange market, the rupee commenced lower at 59.80, which was also its day’s high, from last Friday’s close of 59.72.
It declined further to a low of 60.04, before concluding at 60.01, a fall of 29 paise.
Earlier, it had tumbled by 36 paise on June 18.
“A firm U.S. dollar in the global market and demand for the greenback in the domestic market from the custodian banks, pushed the rupee below 60 handle against the U.S. dollar,” said Anindya Banerjee, Currency Analyst, Kotak Securities.
“Going into the budget we can expect a range-bound market, between 59.50/70 and 60.10/20 on spot. Post-budget, we can expect volatility to rise.
Technically, as long as the pair holds above 59.30/50 region, possibility of another push towards 60.50/60 remains,” said Mr. Banerjee, adding, “Indian rupee did not draw cues from the upswing in the domestic equity markets as Nifty and Sensex touched a life high.”