Indian Rupee Declines

Ivaylo
29 May, 2006
Mumbai

Indian benchmark Sensex had opened higher and struck a high as the trading stepped up. Later in the trading though, the Sensex experienced a streak of high volatility, swinging 210 points for the day. Steel, tech and auto sectors were among the advancing sectors.

[R]9:30AM Indian benchmark Sensex continued to rise amid high volatility.[/R]
Sensex in India ended 43.79 points higher or 0.41% on 10,853.14. The turnover on BSE was $550 million or Rs 2,477 crore against that of $704 million or Rs 3,170 crore on Friday. The market-breadth on BSE was positive with 1,369 shares advancing against 1,060 that declined.

Indian Rupee declined to a five-month low after dipping below Rs 46.01 to a dollar. Exporters of gem and jewelry, garment and software and hotel operators are expected to benefit from the decline. Hotel operators had lost more than 30% in the last fifteen trading days and staged a mild recovery in today’s trading. Indian Hotels rose 4% to Rs. 1,185 and Leelaventures rose 1.4% to Rs 355. India has not added hotel rooms at a pace demand is rising. India has total of 105,000 rooms (whereas gambling city of Las Vegas has more than 100,000 rooms) and demand is rising at 18% a year needing 18,000 additional rooms a year to keep up with the current demand.

Gainers included Tata Steel which rose 5.85% to Rs 569.75 on 2.4 million shares. It soared sharply in the last hour of trading on the news that its integrated steel project at Kalinganagar, Orissa, has started operation. Satyam Computers gained 4.35%, to Rs 709 on 1.04 million shares. Auto stocks also advanced as Hero Honda climbed 4.27% to Rs 862 while L&T gained 4% to Rs 2,458. Hindalco rose 2.50% to Rs 189.60 on 2.1 million shares. Cipla advanced 1.25% to Rs 236.75 on reports that the US Food and Drug Administration has cautiously approved Cipla’s oral form of anti-AIDS generic efavirenz.

Among the decliners were HDFC shedding 2.21% to Rs 1,197.10 on 66,224 shares. Grasim dropped 2.81% to Rs 1,897.55 while HDFC Bank slid 1.90% to Rs 758. FMCG major ITC declined 2.46% to Rs 178.75. NTPC was down 2.40% to Rs 114.35 while Bharti Airtel dipped 1.80% to Rs 380 on 109,000 trading volume.

The BSE metal index led other sector indexes surging 3.18% on strong buying interest. Some of the major gainers were JSW Steel adding up 7.77% to Rs 303, SAIL finishing up 2.72% to Rs 84.95, Kalyani Steel rising up 10% to Rs 383.15, Hindustan Zinc advancing up 5.61% to Rs 738 and Sterlite Industries gaining 8.25% to Rs 443.75.