Rajan impact was evident across Indian markets on the second day as well. While the stock markets continued with their rally as Sensex and Nifty closed over 2 per cent up, rupee also carried on with sharp recovery as it closed after appreciating by over Rs 1.
Gold on the other hand, registered one of the biggest intraday falls due to the speedy recovery in the currency.
It was another great day from equity traders as Sensex breached 19,000 psychological level, while Nifty attempted to cross the 5,600 mark during Thursday’s trading session on back of heavy buying. Sensex rose to its three week high and finally closed 412 points up at 18,797.76. Nifty rose by 144.85 points to 5,592.95 after the new Reserve Bank of India Governor Raghuram Rajan announced multiple steps to help rupee recover and improve the economic situation of the country.
Sensex in the last two trading sessions, since Rajan took over, has gained 745 points. While the new proposed measures by Rajan eased the pressure on the currency as it started showing signs of recovery, stock markets also welcomed the new RBI Governor with fresh buying.
Apart from Rajan effect, another reason which backed the market rally was the heavy buying in all the beaten down sectors while IT, Technology and Healthcare shares saw profit booking. Experts said that investors were again showing interest in the heavily corrected sectors and have started value buying.
While stock markets gave Rajan a ‘thumbs up’, rupee also appreciated to an intraday high of Rs 65.54 per dollar on the back of the measures to improve and support the stock markets and also ease up curbs on investment along with putting a stop on the currency depreciation. As compared to Wednesday’s closing, currency jumped by 105 paise to 66.01 per dollar. He also assured that steps would be taken to attract capital inflows and stressed that focus would be on growth across all sectors of the economy.
Crude oil futures edged higher in the international markets. Nymex crude rose by $0.67 to $ 107.93 per barrel while Brent crude gained $ 0.26 to $ 115.17 per barrel.
Gold tumbles Rs 1,250 Gold fell by Rs 1,250 per 10 grams in the national capital on heavy sell-off by stockists as rupee recovered after RBI’s fresh measures amid a weakening trend overseas.
This is the second biggest fall this week after August 29, when it lost Rs 1,575. In the national capital, gold prices plunged by Rs 1,250 to Rs 30,950 per 10 grams, while in Mumbai, the yellow metal fell by Rs 380 to Rs 31,560 per 10 grams.
Gold lost Rs 1,085 to Rs 32,575 per 10 grams in Kolkata but at Chennai, it managed to close Rs 130 higher at Rs 30,305 per 10 grams.Bullion traders attributed the sharp fall in the precious metal prices to fast recovery in rupee against the dollar after the new RBI chief announced measures to boost economic growth.
“Apart from a weak trend overseas, fast recovery in the rupee made dollar-quoted precious metal cheaper,” said Gaurav Anand, a city-based jeweller. Besides, a weak trend in the precious metals in the global markets on expectations for reduced stimulus in the US and limited military strikes against Syria.
Gold in overseas markets, which normally sets the price trend for the Indian market, had dropped by 0.70 per cent to $1,381.35 an ounce. Investors shifting their funds to surging stock prices further influenced the market sentiment, traders added.
However, in futures trade, at the Multi Commodity Exchange (MCX) gold for delivery in October contract was trading 0.45 per cent higher at Rs 32,751 per 10 grams.