Behaving in the opposite way, Indian markets during Thursday's session gained after many days of downward pressure even when rupee continued to fall. Sensex rose first time in five days and surged 407 points to 18,312.94 levels, while Nifty rose by 105.90 points and finally closed at 5,048.45.
The rise in the stock markets helped investors gain over Rs 1.17 lakh crore. The rupee depreciation, largely on account of the burgeoning current account deficit, threatens to stall Government moves to revive growth before the next election. Finance Minister P Chidambaram, who earlier on Thursday held 3-hour discussions with RBI Governor D Subbarao and his designated successor Raghuram Rajan, said: "There is no cause for panic that seems to have gripped the currency market and that is feeding into other markets.
"We are confident that stability will return to these markets and we can get on with the task of promoting investment and growth," Chidambaram said. Experts said that the markets rallied on the back of metal stocks which started rising after positive manufacturing data from China. China is the biggest metal consumer and improvement in manufacturing numbers indicates that the demand of metals will now start to pick up.
28 stocks out of the total 30 shares comprising Sensex closed in green lead by Hindalco, Sterlite Industries and Tata Steel which rose by 10.93 per cent, 10.42 per cent and 10.22 per cent respectively. On Nifty, 44 stocks out of the 50 share index closed in positive. As far as sector indices are concerned, Apart from Real Estate index, all indices closed with gains. Metal index lead the rally as it closed 8.23 per cent up, followed by Oil & Gas, PSU and Healthcare index which rose by 3.57 per cent, 2.98 per cent and 2.64 per cent respectively.
The market breadth turned positive as 1,280 shares ended with gains, 985 finished with losses and 139 ruled steady. Total turnover rose further to Rs 2,323.03 crore from Rs 2,261.40 crore during Wednesday's trade. Foreign institutional investors sold a net Rs 792.11 crore day, as per provisional figures issued by the stock exchanges. US Federal Open Market Committee's minutes on last Wednesday strongly indicated easing of the bond buying programme soon.
This led to a recovery in the US dollar index and a selloff in the global markets. Suspected RBI intervention helped the battered currency to gain some lost ground to close at 64.55, still down by 44 paise. It also breached the 102-mark against the British pound before closing at 100.6.