The Indian rupee, on Monday, surged to its 11 months high of 58.38 a dollar as foreign institutional investors (FIIs) get in more funds into India. This level was seen in June 2013.
However, the rupee corrected during the day to close at 58.59 a dollar as compared to Friday’s close of 58.79, up 20 paise. Some dealers said the Reserve Bank of India’s intervention was felt during the day.
“This (strengthening of the rupee) will continue for some time and the rupee could appreciate to 57.20 level on its normal course. This is purely backed by FIIs movement. Overall, the picture is getting good, and more FII money will flow,” said Pramit Brahmbhatt, CEO, Veracity Financial Services.
“Indian rupee touched 11-month high, as the currency is benefiting from positive sentiments post a decisive mandate.
Foreign inflows continue in the stock market, as investor chase the best performing market in Asia. Over the near-term, the rupee can continue to appreciate towards 57.50/58.00 levels, as foreign investors continue to show confidence in the Indian equity market,” said Anindya Banerjee, currency analyst, Kotak Securities.
In the past six months, FIIs have brought in approximately $16 billion into India.
IT stocks, on Monday, bore the brunt of an appreciating rupee. As investors stayed away from export-oriented sectors such as IT stocks, TCS closed with a loss of 5.69 per cent.
Infosys was down 4.88 per cent. Wipro closed with a loss of 4.25 per cent. This is despite bench-mark indices gaining with hope that the economy would turnaround under the new government.
In a volatile movement, the BSE Sensex, on Monday, closed with a gain of 241 points at 24,363 points while the NSE Nifty closed at 7,264, up 60.55 points.
“The markets continued to move upwards in the light of NDA’s resounding victory in the Lok Sabha election. Export-oriented stocks such as Pharma and IT were hit hard as the rupee zoomed to a 11-month high. Both CNX IT and CNX Pharma were among the top losers. Both Nifty and Sensex were supported by infrastructure and realty stocks,” Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities, said.
