|Published : 15 Mar 2017, 14:42:54|
Indian rupee hits 16-month high; shares flat
The Indian rupee hit a 16-month peak against the dollar on Wednesday on hopes of increased foreign investments in equities, but the stock market flattened a day after the NSE index hit a record high.
Meanwhile, benchmark 10-year bond yields fell 3 basis points to 6.87 per cent after data released late on Tuesday showed that February consumer inflation came largely in line with expectations.
Sentiment has been boosted after results over the weekend showed that the ruling Bharatiya Janata Party (BJP) scored an overwhelming win in the key state of Uttar Pradesh.
The victory was widely seen as a strong endorsement of Prime Minister Narendra Modi's agenda.
Foreign investors were net buyers of 41 billion rupees ($625.76 million) of shares on Tuesday, when the NSE Nifty hit a record high of 9,122.75, according to BSE data.
That marked the biggest single-day net purchase since Feb. 17, according to Thomson Reuters estimates.
This helped the rupee climb as far as 65.41 per dollar on Wednesday, its strongest since November 2015, compared with its previous close of 65.80.
Stock markets were largely flat, with the Nifty up 0.08 per cent and the BSE Sensex 0.05 per cent higher as sentiment turned tepid ahead of the outcome of the US Federal Reserve's meeting later in the day.
Among gainers, Idea Cellular Ltd rose as much as 13 per cent after CNBC-TV 18 reported the company would sell a majority stake in its tower business to American Tower Corp, citing unidentified sources.
IT stocks fell on worries about the stronger rupee. Tata Consultancy Services Ltd dropped 2.5 per cent, while Infosys Ltd fell 2.4 per cent, acco0rding to Reuters.