Shares surge over 2%; govt measures crucial, say traders

Indian shares rose over two per cent on Thursday as blue chip shares including HDFC surged tracking a rebound in the rupee from a record low in the previous session after the central bank’s move to provide dollars directly to oil companies.

By (Reuters)

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Published: Fri 30 Aug 2013, 9:14 AM

Last updated: Sat 4 Apr 2015, 7:51 AM

The rupee rebounded after the Reserve Bank of India announced late on Wednesday a special window “with immediate effect” to sell dollars to state-run oil companies through a designated bank. Still, traders say the government will ultimately need to act to shore up India’s sagging economy.

Policymakers are at least seen scrambling for solutions to what some economists are now describing as a crisis. Indian Prime Minister Manmohan Singh also told parliament he was willing to make a statement on the state of the economy on Friday, when the lawmakers asked him what steps the government was considering to take to deal with the falling rupee.

“More government measures are expected but more walk than talk is required,” said Deven Choksey, managing director of K R Choksey Securities. The benchmark BSE index rose 2.25 per cent, or 404.89 points, to end at 18,401.04, rising for a second consecutive session.

The broader NSE index rose 2.35 per cent, or 124.05 points, to end at 5,409.05. It had risen as much as 2.7 per cent earlier in the day but August derivatives expiry related selling weighed in the final hour of trade. Among blue chip shares mortgage lender Housing Development Finance Corp surged 6.5 per cent and ITC ended 2.5 per cent higher. India’s state-owned oil companies gained after the RBI announced measures to provide dollars to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum Corp “until further notice”.

IOC rose 0.9 per cent and BPCL ended 1.2 per cent higher, while HPCL fell 0.5 per cent after earlier rising as much as 3.4 per cent.

Oil and Natural Gas Corp also gained 2.1 per cent on expectations of a hike in diesel prices after parliament’s monsoon session ends on September 6. Software exporters such as Tata Consultancy Services and HCL rose to record highs on improving US business prospects.

Tata Consultancy Services ended 2.1 per cent higher after earlier making its all-time high at Rs1,970 while HCL Technologies rose 3.8 per cent after hitting a record high of Rs1,026.15. Tata Motors rose 2.7 per cent.

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