Reuters
Indian shares edged up yesterday as exporters such as Infosys rallied after the rupee fell to a nine-month low, although the weaker local currency hit other blue-chips such as Tata Motors by tempering hopes of interest rate cuts.
Meanwhile, a television news channel reported that Kotak Mahindra Bank may buy ING Vysya Bank, sending both stocks to their record highs. Kotak said no decision had been made in relation to any merger.
Broader gains were capped by worries that overseas investors may slow down purchases or lock in some profits after local shares rose to record highs on Tuesday.
Foreign institutional investors bought shares worth $11.59mn on Wednesday and $2.4mn on Tuesday. They have bought a net $15.47bn worth of shares so far in 2014, according to regulatory data.
Investors are waiting for the winter session of the parliament scheduled to begin next week and the Reserve Bank of India’s policy review on December 2, to decide their further course of action.
“There is event risk of winter session, RBI review. Foreign investors are also in a wait mode before these events and are likely to pare some positions,” said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services.
The BSE index rose 0.12% to 28,067.56, 0.8% away from its record high hit on Tuesday.
The NSE index gained 0.23% to 8,401.90, above the psychologically important 8,400 level, and 0.64% away from its all-time high of 8,455.65.
Exporters led gains. Infosys rose 1.3%, while Tata Consultancy Services ended up 1.2%.
Tech Mahindra rose 3%, HCL Technologies gained 1.1% and Wipro advanced 1.2%.
Among drug exporters, Cipla rose 3.2% and Lupin gained 1.3%.
Kotak Mahindra ended 7.4% higher after marking a record high of Rs1,163 earlier in the day, while ING Vysya soared 7.8% after marking an all-time high of Rs865.
Earlier in the day, ET Now business news channel reported Kotak is close to acquiring ING Vysya.
Among losers, blue-chips, including rate-sensitive stocks, such as Tata Motors declined 0.9% as investors tempered rate-cut hopes after the rupee fell to its weakest in nine months.
HDFC Bank ended lower 0.9%, while Axis Bank lost 0.8%.
Rupee recoups losses to end nearly flat
The rupee ended nearly flat yesterday after a fall to a nine-month low had sparked mild intervention from the central bank, as emerging market currencies were hit by a weak reading in a private survey of China’s manufacturing.
The China flash HSBC/Markit manufacturing purchasing managers’ index (PMI) fell to a six-month low in November, with output contracting for the first time in six months.
The falls in the rupee are raising the prospect of higher imported inflation, although the slump in global crude prices is tempering some of those concerns.
Analysts also note the rupee could prove sturdier than other emerging market economies given confidence about a recovery in the country’s economy.
Earlier in the day, traders said the central bank was likely selling dollars through state-owned banks to stem the rupee’s fall.
“We might see some retracement towards 61.90 (per dollar) and then some bounce again,” said Hemal Doshi, a currency strategist at Geojit Comtrade Ltd
“Exporters in India got 62 plus levels after a long time so they also sold today, and these dollar sales will keep coming around 62.20 levels,” Doshi said.
The partially convertible rupee closed at 61.94/95 per dollar versus its previous close of 61.96/97, after earlier touching a low of 62.22, its weakest level since February 20.
