Dalal street rose for a fourth consecutive session on Thursday to its highest close in a month,riding a global rally on continued expectations of monetary stimulus and a rate cut at home and abroad that would spark a recovery in risk assets.
After gaining nearly 500 points in the last three days,the 30-share Sensex opened with a 100-point gain on strong Asian cues. It consolidated gains further as the rupee clawed back to 54-levels intra-day. The index gained 195 points to 16,649.05 as investors cheered the government push to the infrastructure sector and the rising rupee.
European markets opened higher on hopes that global central banks will resort to a fresh round of stimulus as the euro zone crisis deepens. All eyes are on Federal Reserve chief Ben Bernanke who is scheduled to speak to US Congress later in the day and investors expect to hear about quantitative easing.
On the other hand,the rupee commenced higher at 55.14 a dollar from the overnight close of 55.36 and immediately touched a low of 55.30 on some dollar demand from oil importers as crude oil hovered around the $ 85 per barrel. However,the currency bounced back to breach the 55-mark to a high of 54.92 before concluding at 54.94,its highest closing since May 18. This was a rise of 0.76 per cent or 42 paise. The rupee has gained 71 paise in the last three sessions while the Sensex rose over 600 points.
Banks such as ICICI Bank extended a rally on hopes the RBI would cut interest rates on June 18,at a time when global investors are betting that Federal Reserve will ease monetary conditions for the US economy. In a surprise move,China cut benchmark interest rates by 25 basis points to shore up slackening economic growth.