By -
Aug 19, 2014
India’s rupee rose to this month’s
strongest level as stocks advanced on optimism the government is
stepping up efforts to rein in the budget deficit.
The S&P BSE Sensex (SENSEX) index of local shares climbed as much as 0.5 percent to a record high today. On Aug. 14, India cut the size of its weekly bond auctions in the coming five periods to 120 billion rupees ($2 billion) each from 140 billion rupees. The decision has buoyed confidence in the government’s plan to narrow its shortfall, according to Mumbai-based brokerage Edelweiss Financial Services Ltd.
“The overall bullish sentiment across asset classes is driven by expectations the government will take steps to strengthen the economy,” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial in Mumbai. “The rupee gains are driven by inflows into equities.”
The Indian currency gained 0.1 percent 60.6850 per dollar as of 9:55 a.m. in Mumbai, prices from local banks compiled by Bloomberg show. It climbed to 60.6575 earlier, the strongest since July 31. The local currency market was shut yesterday for a holiday. The rupee rose 0.8 percent on Aug. 14.
Finance Minister Arun Jaitley aims to reduce the budget deficit to 4.1 percent of gross domestic product, which would be the least since 2008, in the year through March 2015, according to budget estimates released last month.
The benchmark equity index has jumped about 25 percent this year, the best performer among the world’s 10 biggest markets, as foreigners poured $12.3 billion into local stocks.
The rupee’s one-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose three basis points, or 0.03 percentage point, to 7 percent.
Three-month offshore non-deliverable forwards rose 0.4 percent to 61.63 per dollar, data compiled by Bloomberg show. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Anil Varma, Andrew Janes
The S&P BSE Sensex (SENSEX) index of local shares climbed as much as 0.5 percent to a record high today. On Aug. 14, India cut the size of its weekly bond auctions in the coming five periods to 120 billion rupees ($2 billion) each from 140 billion rupees. The decision has buoyed confidence in the government’s plan to narrow its shortfall, according to Mumbai-based brokerage Edelweiss Financial Services Ltd.
“The overall bullish sentiment across asset classes is driven by expectations the government will take steps to strengthen the economy,” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial in Mumbai. “The rupee gains are driven by inflows into equities.”
The Indian currency gained 0.1 percent 60.6850 per dollar as of 9:55 a.m. in Mumbai, prices from local banks compiled by Bloomberg show. It climbed to 60.6575 earlier, the strongest since July 31. The local currency market was shut yesterday for a holiday. The rupee rose 0.8 percent on Aug. 14.
Finance Minister Arun Jaitley aims to reduce the budget deficit to 4.1 percent of gross domestic product, which would be the least since 2008, in the year through March 2015, according to budget estimates released last month.
The benchmark equity index has jumped about 25 percent this year, the best performer among the world’s 10 biggest markets, as foreigners poured $12.3 billion into local stocks.
The rupee’s one-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose three basis points, or 0.03 percentage point, to 7 percent.
Three-month offshore non-deliverable forwards rose 0.4 percent to 61.63 per dollar, data compiled by Bloomberg show. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Anil Varma, Andrew Janes
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