Rupee up 142 paise against dollar in late morning deals

The rupee rose by 142 paise to 61.96 in late morning trade on Thursday on fresh selling of the U.S. currency by banks and exporters triggered by sharp fall in dollar in overseas amid smart rise in the equity market.

In New York market, the U.S. dollar fell sharply against major rivals yesterday, especially against emerging-market currencies, after the Federal Reserve made no change to its monthly asset-purchase programme.

The rupee resumed higher at 61.70 per dollar as against the last closing level of 63.38 at the Interbank Foreign Exchange (Forex) Market and firmed up further to 61.64 before quoting at 61.96 per dollar (1050 hours).

It showed a sharp gain of 142 paise or 2.24 per cent from its last close.

It moved in a range of 61.64 and 62.08 per dollar during the morning deals.

Meanwhile, the benchmark BSE-30 share Sensex rose by 489 points or 2.45 per cent to 20,451.56 at 1050 hours.

Keywords: inter-bank foreign exchange, rupee-dollar trade, forex market, opening trade

SBI increases base rate to 9.80 pc, makes loans costlier

A a day ahead of the RBI's policy review, State Bank of India (SBI) on Thursday increased its base rate, or the minimum rate of lending, to 9.80 per cent, making loans costlier.

"State Bank of India has revised the base rate by 0.10 per cent from 9.70 per cent per annum to 9.80 per cent," it said in a statement. Retail term deposit rates have been revised upward, it said.

SBI is the first major state-run bank to hike lending rates after short-term rates rose as a result of the Reserve Bank of India's liquidity tightening moves announced in July.

The decision comes on the eve of the mid-quarter review of the monetary policy.

According to watchers, new RBI Governor Raghuram Rajan has been given some room to take an accommodative stance after the US Federal Reserve delayed the tapering of liquidity infusion.

SBI also increased the spreads on auto and home loans by as much as 0.20 per cent, which will affect new borrowers.

Home and auto loan borrowers typically pay a margin, or a spread, above the base rate, which is arrived at as per the risk and quantum of borrowing.

The bank has hiked rates for loans under the benchmark prime lending rate, an older system of computing interest rates, to 14.55 per cent from 14.45 per cent. The lending rate hikes are effective from today, it added.

A senior bank official said the decision to increase rates was taken by the asset liability committee, which met late last evening.

"There has been an increase in our cost of funds and the pressure will only increase further as we enter the festive season, which increases the requirement for liquidity," the official said.

New housing loans under Rs 30 lakh will come at 10.10 per cent as against 9.95 per cent earlier, while interest rates on auto loans will go up to 10.75 per cent, the official said.

Ratan Tata joins Carnegie Board of Trustees

India's leading industrialist Ratan Tata has been nominated as a member of the board of trustees of the Carnegie Endowment for International Peace, an American think tank, a media release has said.

"We are extremely proud to welcome Ratan to our board of trustees," Harvey V Fineberg, chairman of the board said in a statement on Wednesday.

"Ratan has an unparalleled knowledge of the global economy, as well as the business sector in one of the world's most important emerging economies," Fineberg said after the announcement.

"He has enormous experience managing large organisations, and I know he will be a tremendous asset for Carnegie," he added.

Welcoming him, Carnegie President Jessica T Mathews said: "We are honoured to welcome Ratan to Carnegie's board."

Finberg expressed hope that having Tata on their Board of Trustees would be an asset for Carnegie in developing it as "the truly global think tank" and would also be helpful in establishing Carnrgie's new South Asia Centre in New Delhi.

Ratan Tata was the chairman of Tata Sons, the holding company of the Tata Group, from 1991 until his retirement at the end of 2012. He was also chairman of the major Tata companies, including Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels, and Tata Teleservices. During his tenure, the group's revenues grew to over $100 billion annually.

Tata is chairman of two of the largest private-sector-promoted philanthropic trusts in India. He is also a member of the Indian Prime Minister's Council on Trade and Industry.

Carnegie Endowment for International Peace, the oldest think tank in the United States was established in 1910. It is globally renowned with research centres in Moscow, Beijing, Beirut, and Brussels as well as a program in Almaty, Kazakhstan in addition to its headquarters in Washington, DC.

Rupee jumps to 1-month high, up 158p to 61.80 vs USD as US Fed defers taper

The rupee jumped to one-month high as it gained 158 paise to 61.80 against the dollar at the Interbank Foreign Exchange market on Thursday on hopes of increased capital inflows after the US Federal Reserve's decided to keep its stimulus programme intact.

Traders said besides expectations of increased capital inflows, the dollar's weakness against other currencies overseas, after the US Federal Reserve surprised markets by leaving its massive bond-buying programme unchanged, helped the rupee gain.

The rupee had settled just a paise lower at 63.38 against the dollar in yesterday's trade.

Meanwhile, stock markets were up by nearly 3 per cent in the opening trade.

The BSE benchmark index soared by 574.13 points, or 2.88 per cent, to 20,536.29, while National Stock Exchange's Nifty rose by 183.65 points, or 3.11 per cent to 6,083.10 in opening trade.

Sensex surges over 500 points, Rupee at over 1-month high on US Fed move

The BSE benchmark index Sensex soared over 500 points to touch the 20,000 level in morning trade on Thursday following sustained buying by funds and retail investors, triggered by strengthening rupee and a firming trend overseas after the US Federal Reserve decided to keep its stimulus programme intact.

At 10.01 am, Sensex was up 545.58 points at 20507.74. Similarly, Nifty was up 176.50 points at 6075.95 during the same time.

The 30-share index, which had gained nearly 230 points in the past three sessions, rose further by 574.13 points, or 2.88 per cent, to 20,536.29 points with banking, realty, capital goods and auto sector stocks leading the rally.

The broad-based NSE Nifty also moved up 183.65 points, or 3.11 per cent, to 6,083.10.

Brokers said market sentiment turned extremely bullish on a flurry of buying by funds driven by strengthening rupee and a firming global trend after the US Federal Reserve surprised markets by sticking to its massive bond-buying programme.

The BSE banking index gained the most by surging 6.89 per cent to 12,711.50 as stocks like SBI was up 5.32 per cent, followed by ICICI Bank (8.18 per cent), Axis Bank (7.13 per cent), Yes Bank (16.27 per cent) and HDFC Bank (5.12 per cent).

In other Asian markets, Hong Kong's Hang Seng rose by 1.67 per cent, while Japan's Nikkei by 1.32 per cent in early trade on Thursday.

The US Dow Jones Industrial Average gained 0.95 per cent to hit record high in Wednesday's trade.

Business Today's Mahesh Nayak in his analysis of US Fed move and its impact on Indian financial markets wrote: For India, the news of zero taper is positive and this may also have a positive reaction with the financial market rising on Thursday.

However, overall it doesn't make much difference to India. In the last four years and nine months since QE started in the US on 25 November 2008 till date, the Fed has pumped slightly over $3 trillion to boost its battered economy. In the same period, close to $105 billion foreign institutional investors (FIIs) inflows came into the Indian equity and debt market. Even if one assumes that the entire FII inflows into India came from US, it this will not be over 3.5 per cent of the overall infusion of money by the Fed.

Meanwhile, zero tapering by the Fed will be soothing some nerves at Reserve Bank of India (RBI). On Friday, new RBI governor Raghuram Rajan will come out with his maiden policy and any tapering would have put pressure to further tighten interest rates to protect the rupee. However with the tapering being postponed, RBI can take its chance to cut rates for boosting growth. It will be interesting to see if Rajan bites the bullet.