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Weekly: Markets surge over 3% on lower CAD, Rupee gains

This article was posted on Jun 29, 2013 and is filed under Market News

In the volatile week ended June 28 Indian stocks surged over 3%, snapping a three-week losing streak, after lower-than-expected CAD and a strong rupee

In the volatile week ended June 28 Indian stocks surged over 3%, snapping a three-week losing streak, after lower-than-expected current account deficit eased worries about deficit funding and the strengthening rupee against the US dollar also boosted market sentiment.

In the week to June 28, the 30-share S&P BSE Sensex zoomed 622 points or 3.3% to 19,396 and the 50-share CNX Nifty surged 175 points or 3.1% to end at 5842.

Most of the gains came in the last two trading days after lower-than-expected current account deficit and weak US economic growth data sparked short covering ahead of the expiry of June derivative contracts on Thursday.

For the March quarter, CAD narrowed to $18.1 billion, or 3.6 per cent of GDP, from an all-time high of $32.6 billion, or 6.7 per cent of GDP, the previous quarter.

During 2012-13, CAD stood at $87.8 billion (4.8 per cent of GDP), against $78.2 billion (4.2 per cent of GDP) during the previous financial year. A burgeoning trade deficit, along with a significant decline in invisible earnings, caused widening of CAD during the year.

For the financial year ended March, the country had a balance of payments surplus of $3.83 billion, compared with a deficit of $12.8 billion a year earlier. The swing to surplus was due to robust capital inflows. Experts said the country was in a far better shape than during a balance of payments crisis of 1991.

For more visit: Business Standard

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