Market Khabar: Rupee may plunge to 65-67 against $
Comforted by the statements from the US Fed chairman that the its stimulus policies would be in place as long as necessary and FDI hike in several sectors including 100 per cent foreign direct investment in telecom, markets ended with a fourth straight week of gains.
On the BSE, the Sensex closed 192 points higher at 20,150 and the Nifty on the NSE ended with 20 point gain at 6,029.
RBI steps to tighten rupee liquidity dampened sentiment and extinguished hopes of a rate cut in near future. It is pertinent to observe that Bank Nifty index has corrected far more than Nifty.
With the steps from the government and the RBI to shore up the rupee not yielding any significant results, FIIs have turned sellers again in the last few sessions. Doomsayers predict a catastrophic fall of rupee to Rs 65/67-level against dollar in the coming few weeks.
Market players have shifted attention to IT and pharmaceuticals for their earning resilience and likely gains from rupee depreciation.
Focus of markets in the near-term will be on Q1 results season and RBI monetary policy meeting in end-July.
Futures and options
Ahead of the settlement week, derivative segment witnessed robust volumes and strong stock specific activity.
Moves of 5 per cent to 10 per cent have become common reflecting the heightened volatility in the markets.
Highest open interest in the index options is at 6,000 call and 5,900 put options. With 5,900-level acting as strong support, punters do not rule out a surprising move by the Nifty towards 6,200-mark.
The week ended belonged to stocks from FMCG, IT and oil and gas sectors.
Better than expected results from TCS gave further momentum to the IT counters.
Results from RIL were in line with expectations, but analysts have expressed concerns over the quality of the earnings.
Flat petrochemical margins and falling gas output were a disappointment.
Renewed buying interest in FMCG stocks propelled many to new 52-week highs. Despite the momentum in the sector, caution is advised.
The first visible signs of balance sheet stress in some private sector banks triggered sell off in most of the banks.
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