Nifty Recovers Above 10,400; Rupee Falls To 2-Month Low Against US Dollar

The Sensex gained some momentum in mid-morning trade, after struggling in opening trade. At 9:55 am, the Sensex was up nearly 100 points while Nifty edged above 10,400. Analysts say that the fallout from the PNB fraud could keep domestic stock markets edgy for some time. "It could continue to impact for some more time. The issue of its impact on the entire PSU banking system will keep markets edgy," said Siddhartha Khemka, head of retail research, Motilal Oswal Securities.

The rupee however fell to 2-month low of 64.51 against the US dollar, against its previous close of 64.21, amid a broad strengthening of the greenback. On Friday, the rupee had ended 30 paise lower at 64.21 against the US dollar on rising global crude prices and worsening trade deficit. Currency markets were closed yesterday. In recent trade, the rupee was trading at 64.44 against the US dollar.


IT and metal stocks led the gains today while realty, healthcare and PSU banking stocks were under pressure. Among Nifty 50 stocks, Hindalco, Tata Steel, TCS and Vedanta were up between 1 per cent and 2 per cent. Kotak Mahindra Bank, Coal India, Cipla, Aurobindo Pharma and Bharti Infratel were among the laggards.

Among PSU banks, PNB was down over 3 per cent at Rs 112, extending its decline to the fifth day.

Elsewhere, in other markets, Asian stocks slipped on Tuesday, their recent recovery stalling after European equities broke a winning streak, while the dollar edged up to pull further away from three-year lows. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.5 percent. Australian stocks fell 0.3 per cent, South Korea's KOSPI lost 0.7 per cent and Hong Kong's Hang Seng dropped 0.85 per cent. Japan's Nikkei retreated 1.25 per cent after three successive days of gains.

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The pan-European STOXX index fell 0.6 percent on Monday following a three-day ascent, dragged down by falls in consumer staples stocks. US markets were closed on Monday for a holiday, and the focus will be on whether Wall Street can maintain its recovery once trading resumes. The Dow gained 4.5 percent last week, winning back more than half of the territory lost during a sharp downturn earlier in the month.

The VIX index - Wall Street's "fear gauge" measure of market volatility - has slipped below 20, less than half the 50-point peak touched earlier in February. The dollar index against a basket of six major currencies was 0.3 per cent higher at 89.348 to put further distance between a three-year low of 88.253 set on Friday. The dollar was a shade higher at 106.720 yen and the euro dipped 0.15 percent to $1.2388. (With Agency Inputs)