Bloomberg News

Indian Stock Futures Drop as Funds Sell Shares on Rupee

May 28, 2012

Indian stocks climbed to more than a two-week high as the rupee strengthened and Asian equities rose after opinion polls of Greek voters allayed concern the country will exit the euro area.

ITC Ltd. (ITC), the biggest cigarette company, rose the most in more than a week. State Bank of India, the biggest lender, led its peers higher. Tata Motors Ltd. (TTMT), India’s largest truckmaker, rallied to an almost two-week high.

The BSE India Sensitive Index (SENSEX), or Sensex, rose 1.3 percent to 16,433.31, according to preliminary closing prices at 3:30 p.m. in Mumbai, bound for its highest close since May 9. The Reserve Bank of India Governor Duvvuri Subbarao pledged last week to take steps as needed to stabilize the rupee, helping it recover from a record low on May 24, the day the government allowed the first increase in gasoline costs in almost seven months to curb the budget deficit.

The rupee touched 55.0100 per dollar, the strongest level since May 18, and the Dollar Index, which tracks the greenback against six major trading partners, slid for the first time in a week as investors returned to riskier assets.

Foreign investors sold a net $8.6 million of local stocks on May 24, extending this month’s sales to $177 million, data from the market regulator show. Overseas investors turned net sellers of local shares in April for the first time in 2012, contributing to the rupee’s weakness. Still, their investments of a net $8.6 billion into domestic equities so far this year is a record for the period, the data show.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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