The stock markets on Friday rose for the third day with S&P BSE benchmark Sensex jumping 218.68 points to end at an over two-week high of 18,619.72 after Prime Minister Manmohan Singh said that the rupee’s decline will be addressed without capital controls or reversal of reforms.
The markets lapped up his statement in Parliament where he appealed for a political consensus to put the economy back on a high-growth trajectory. Singh also said that the government would make every effort to maintain a macro-economic framework friendly to foreign capital inflows to enable orderly financing of the current account deficit.
While the stock markets were volatile as the Prime Minister began his speech in Parliament shortly after noon, share prices surged on heavy buying in the last 90 minutes of trade with sectors like consumer durables, healthcare, banking, IT and FMCG seeing good enquiries.
The 30-share Sensex ended at 18,619.72, up 218.68 points or 1.19 per cent, extending gains to the third session in which the index has risen over 650 points. Friday is the highest close for Sensex since August 14 (19,367.59).
The currency markets also appeared to strengthen with the rupee settling at a day's high of 65.70, showing a rise of 85 paise or 1.28 per cent on dollar selling. On Thursday, it had spurted by 225 paise -- the most in at least 15 years -- after the RBI opened a forex swap facility for PSU oil firms.
Since plunging to a record low of 68.85 on August 28, the rupee has rebounded 310 paise, providing much-needed relief to the economy which grew at 4.4 per cent in the June quarter, the slowest pace in at least four years. The GDP data came after the markets closed on Friday.
The broadbased National Stock Exchange index Nifty rose by 62.75 points, or 1.16 per cent to end at 5,471.80, after moving between 5,360.20 and 5,493.30.
Meanwhile, gold prices fell further by Rs 625 to Rs 31,700 per ten grams, extending losses for the second straight day in the national capital today on sustained selling by stockists.
Critics have recently focussed on the government's failure to revive GDP growth, assuage fears of foreign investors and cap expenditure on programmes like providing cheap foodgrains to poor people ahead of the 2014 polls.