The Hindu : Business : Markets rebound on FM’s soothing comments

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Markets rebound on FM’s soothing comments

Sensex, after losing 705 points in early trade, settled higher

MUMBAI: Stocks on the Bombay Stock Exchange staged an impressive rebound rally on Thursday and the 30-share sensitive index (Sensex), after dropping more than 700 points, snapped the seven-day losing-spree and closed at 13315.60, up by 53 points, following Finance Minister P. Chidambaram’s re-assuring comments on the health of Indian financial institutions and banks. Marketmen said a coordinated action by global central banks to pump in billions of dollars into the markets also bolstered investor sentiment.

After tumbling to two-month low of 12558.14 by losing 705 points in early trade, the Sensex settled the day higher by 52.70 points.

Similarly, the S&P CNX Nifty of the National Stock Exchange closed up 29.90 points at 4038.15.

In his first reaction after the collapse of Lehman Brothers and the bailout of the largest U.S. insurer AIG, Mr. Chidambaram said India’s financial institutions were on a sound foundation.

The global turmoil had pulled out 1682.07 points, or 11.26 per cent, in the last seven straight sessions from the BSE barometer.

Tracking a steep overnight fall on the Wall Street, most Asian markets opened sharply lower but after a coordinated effort by the U.S. Federal Reserve and other world’s top central banks to pump billion of dollars to boost liquidity in the financial markets aided the smart recovery in share values at a later stage.

Among the gainers on the BSE, Sterlite rose by 3.46 per cent followed by HDFC Bank 3.17 per cent, RIL 3.16 per cent, NTPC 3.05 per cent, ICICI Bank 2.78 per cent, Maruti 2.70 per cent, M&M 2.46 per cent, REL Infra 2.43 per cent and SBI 2.14 per cent.

However, Ranbaxy Lab dipped by more than 10 per cent on reports that the U.S. Government had banned over 30 generic drugs made by the company citing procedural violations in the manufacturing process in two of its Indian units. Other losers were, Jaiprakash Associates, Satyam Computer, Infosys, Tata Steel and DLF. The trading volume shot up to Rs. 7,376.23 crore from Rs. 5,813.24 crore on Wednesday.

Rupee sheds 7 paise

The Indian rupee on Thursday traded lower by 7 paise against the dollar as foreign banks and oil companies stepped up dollar purchases amid growing concerns about capital outflows after a turmoil in global financial markets.

The rupee opened sharply lower at 46.75/76 against the greenback, cheaper by 41 paise from its previous close of 46.34/35.

However, the Indian currency staged a recovery towards the end and closed at 46.41/42 against the U.S. dollar.— PTI

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