NEW DELHI: The S&P BSE Sensex
rallied over 700 points in trade on Tuesday to touch its key
psychological level of 20,000. Tracking the momentum, the 50-share
Nifty, which rallied for the fourth consecutive day in a row, surged
over 200 points to hit its key psychological level of 5,900 in trade
today.
The rupee was at a two-week high following weakness in
the dollar index. The partially convertible rupee was at 63.90 in late
trade.
The 30-share index ended at 19,997.10, up 727.04 points
or 3.77 per cent. It touched a high of 20,012.69 and a low of 19,444.66
in trade today.
The Nifty closed at 5,896.75, up 216.35 points or 3.81 per cent. It touched a high of 5,904.85 and a low of 5,738.20 in trade today.
Tracking the momentum, as much as 50 stocks hit their fresh 52-week
highs in rallying markets today on the BSE. Stocks which rallied to
their 52-week high include names like Tata MotorsBSE 10.12 % which rallied over 10 per cent; and pharma major Cipla.
As much as ten stocks hit their 52-week highs on the NSE
as Nifty rallied towards its key psychological level of 5,900 for the
first time since July 26. Stocks which rose to their 52-week highs on
the NSE include CiplaBSE 0.34 %, HCL TechnologiesBSE 4.27 %, Four Soft BSE -1.72 %, Tata Motors, Alembic, etc.
We have collated five reasons which may have led 700-point rally in the market: Upbeat Trade-Data: India's
trade deficit for the month of August narrowed to $10.9 billion, versus
$12.26 billion in July. The deficit narrowed on the back of improving
exports and declining imports, and was down 11% month-on-month.
In the recent past, analysts have started emphasising more on trade
data because it constitutes gold and oil import data which are top two
constituents used in calculating the current account deficit (CAD).
Gold imports for FY14 till August were reported at $197.8 billion, a
rise of 1.7% year-on-year. Gold imports declined significantly to $0.65
billion versus $2.2 billion month-on-month.
Given nearly 15 per
cent drop in rupee so far in the year 2013, there are a few data points
which can conclude that the macroeconomic slowdown and other headwinds
are behind us.
"The one single data point that one should watch
out for over the next 2-3 months is trade deficit. It would be
interesting to see the trade deficit stay at current levels," said
Manishi Raychaudhuri, MD & HoR, BNP Paribas BSE -3.96 % Securities in an interview with ET Now.
"Even if it moves up slightly to $13.5-14 billion per month, it would
be satisfactory. This is because the low trade deficit numbers in
June-July were supported by relative lack of economic activity and the
non-wedding season," he added.
Rupee at two-week high:
The rupee rallied to its two-week high as expectations for a narrower
trade deficit and receding concerns about Syria helped the currency
continue its recent recovery from record lows hit last month.
The rupee rose as much as 1.7 percent on the day, and looked set for a
fourth consecutive session of gains after Raghuram Rajan announced key
measures to stem rupee fall. However, the currency is still down nearly
15 per cent so far in the year 2013.
According to analysts, hopes of further measures from Raghuram Rajan will keep the momentum intact in the rupee.
"The currency appreciation that we have seen since last week, is
essentially due to certain announcements after the new RBI governor took
charge. However, the fundamental factors behind rupee fall continue to
signal a weakening trend," said Dhananjay Sinha, Co- Head, Institutional
Research- Economist & Strategist at Emkay Global Financial Services Ltd BSE 4.99 %.
Market participant see the rupee rising to 63 against the US dollar
this week and is likely to trade in the range of 63-65.50, said a PTI
report
