Stocks, rupee jump as oil prices slip after Iran nuclear deal; Market rally adds Rs 1 lakh crore to investor kitty
Mumbai: The Sensex snapped a three-day losing run and the rupee soared against the dollar on Monday as tumbling oil prices following the Iran deal gave rise to hopes of a slimmer current account gap.
The S&P BSE Sensex opened on a strong note and stayed firm through the day. It shot up 387.69 points, or 1.92 per cent, to end at 20,605.08 - close to the day's high.
Investor wealth across BSE-listed stocks jumped by Rs 1 lakh crore.
Post-deal with world powers, Iran briefs India on moving ahead
The NSE Nifty rose 2 per cent, gaining the most among Asian indices, and climbed 119.90 points to 6,115.35. The fall in global crude oil prices amid strong local equities pushed the Indian rupee up by 37 paise to close at 62.50 against the dollar.
At the Interbank Foreign Exchange market, the domestic currency commenced strong at 62.67 a dollar from last close of 62.87. It moved in a range of 62.44 and 62.70 before finishing at 62.50, a rise of 37 paise or 0.59 per cent.
Benchmark WTI and Brent crude oil prices fell nearly 2 per cent after Iran agreed to limit its nuclear programme to get some relief from sanctions, raising the possibility that curbs on its oil exports would soon be lifted.
Lower crude prices would help ease inflation in India, which imports about 80 per cent of its crude oil requirements.
"It would cut down on its growing current account deficit by reducing the import costs on crude oil," said Raghu Kumar, co-founder of brokerage firm RKSV. India's crude oil imports in 2012-13 were to the tune of USD 144 billion and this exerted pressure on the current account deficit.
The RBI on November 13 said deficit this year will be USD 56 billion, less than 3 per cent of GDP and USD 32 billion less than last year.
Forex brokers said apart from the positive sentiments related to the Iran deal and oil prices, the RBI's recent move to relax a norm for banks using a special swap window for overseas borrowings helped the local currency cement gains.
