Rupee Rises 20 Paise To 87.39 On Strong Equities, GST Reform Hopes
The rupee rose 20 paise to 87.39 against the US dollar, boosted by strong domestic equities. Sensex surged 1000 points, and Nifty retested 25,000 after PM Modi's GST reform hint.
The rupee gained 20 paise to open at 87.39 against the US dollar in early trade on Monday, supported by strong domestic equities. Meanwhile, India's equity indices jumped over 1000 points or 1 per cent in the opening trade, followed by PM Narendra Modi's comment on GST reforms by this Diwali during his 12th consecutive Independence Day speech on August 15.
Sensex was trading over 800 points higher at 81,482 at noon, while Nifty gained 300 points to retest 25,000-mark.
In a statement issued after Prime Minister Narendra Modi's Independence day address where he announced that GST reforms which will lower tax burden substantially and benefit small industries will be implemented by Diwali, the ministry said that the central government has sent its proposal on GST rate rationalisation and reforms — specifically linked to structural reforms, rate rationalisation, and ease of living — to the Group of Ministers (GoM) constituted by the GST Council to examine this issue.
Forex traders said lingering uncertainty over India-US trade tariffs is likely to keep market participants cautious. At the interbank foreign exchange market, the rupee opened at 87.46 before strengthening to 87.39, compared with Thursday's close of 87.59. Both forex and equity markets were shut on Friday due to Independence Day.
Meanwhile, Brent crude futures slipped 0.06% to USD 65.81 per barrel, with prices easing on reduced concerns over Russian supplies after the US refrained from imposing fresh curbs at its August 15 meeting.
Investors will also track US Federal Reserve Chair Jerome Powell's speech at Jackson Hole this week for signals on the timing of rate cuts at the September policy meeting, Bhansali noted. The dollar index inched up 0.01% to 97.86.
On the domestic market front, the Sensex surged 1,021.93 points to 81,619.59 in early trade, while the Nifty gained 322.2 points to 24,953.50. Foreign Institutional Investors, however, were net sellers on Thursday, offloading equities worth Rs 1,926.76 crore, exchange data showed.
(With PTI Inputs)
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