HDFC Bank, Infosys and ONGC shine as realty, banking and consumer durables stocks appreciate.

Stock market indices surged on Thursday on better-than-expected corporate results, which helped banking stocks that were going down in the last few days, to recover on the back of Axis Bank’s first quarter results.

The S&P BSE Sensex closed above the 20000-mark again with a gain of 179.68 points.

Realty stocks, which were hammered in the downturn in the last few days, gained the most with 2.53 per cent followed by banks 2.04 per cent, consumer durables 1.72 per cent, PSUs 1.50 per cent, capital goods 1.49 per cent and oil & gas 1.31 per cent. All sectoral indices ended in the positive territory.

On the National Stock Exchange (NSE), the 50-share Nifty closed at 6038.05 with a gain of 64.75 points.

“The measures taken by the government and the Reserve Bank of India (RBI) lifted sentiment and made short-sellers go for cover. Axis Bank results, which were above street expectations, too, lifted the sentiment.

“Nifty’s next resistance is at 6120 and support at 5980,” said Kishor P. Ostwal, CMD, CNI Research Ltd.

The markets moved up smartly after some negative concerns eroded following the measures announced by the RBI on Monday by raising short-term interest rates to stem the fall of rupee, which resulted in bond yields surging.

33 paise drop in rupee

Meanwhile, the rupee depreciated further on Thursday as it closed at 59.67/68 a dollar compared to its previous close of 59.34/35.

In the offshore non-deliverable forwards (NDF), the one-month contract was at 60.08 and the three-month contract was at 60.90 a dollar.

The rupee has already moved into undervalued territory on a real effective exchange rate (REER) basis.

Sensitive countries

So far, the RBI has not intervened aggressively to support the rupee, said a report of Macquarie Research.

Indonesia, India and to a lesser extent the Philippines, are the most sensitive countries in Asia to further outflows.

In the case of India, flows to market cap seem to be close to historical highs and ongoing external account pressures and ensuing currency weakness could force foreign selling.

Macquarie Research also said that any disruption globally or another round of dollar strengthening and rising treasury yields in a short span could result in rupee weakening by a further 5-7 per cent from the current levels.

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