Sensex up 500 points as rupee rebounds

The giant screen outside the Bombay Stock Exchange
The giant screen outside the Bombay Stock Exchange

The Bombay Stock Exchange Sensex on 8 May gained 506 points, closing at 27,105, while Nifty jumped 134 and ended at 8,191.50. This rebound comes after three days of sell off in the stock markets during which time the Sensex had come down by nearly 900 points.

Rupee too bounced back from 20-month low, coming to roost below the key 64 per USD mark. It ended at Rs 63.94, up 46 paise from 7 May close of Rs 64.23 per USD.

The spring back is being credited to short covering, a strategy where stocks are bought to cover open short position. Short covering happens after every major selloff.

Other factors that are helping the sentiments include finance minister Arun Jaitley’s announcement to form a committee to suggest ways and means to resolve the MAT dispute.

Corporate earnings will also play a major role in market recovery. While analysts say until corporate profitability improves, a sharp rise in equities is unlikely.

Meanwhile, investors will be eyeing the reform process, which seems to have hit a dead end. The GST Bill will likely be taken up in the Rajya Sabha on Monday, where the government is not in a majority.




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