Decade’s biggest gain for rupee as stocks soar

Decade’s biggest gain for rupee as stocks soar
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First Published: Wed, Jul 23 2008. 10 39 PM IST
Updated: Wed, Jul 23 2008. 10 39 PM IST
Mumbai: The rupee rose by the most in more than a decade and stocks and bonds soared on speculation the government will allow more overseas investment in the financial industry after surviving a confidence vote in Parliament.
The currency strengthened 1.6% to 42.075 a dollar at 5pm in Mumbai. The benchmark stock index, the Sensex, gained 5.9% to 14,942.28, the most since 25 March and the biggest fluctuation of global benchmark indexes tracked by Bloomberg.
Prime Minister Manmohan Singh’s victory gives him a mandate to raise foreign investment in insurers and lift curbs on voting rights in banks that had been held up by his former Left allies, according to Citigroup Inc. and Goldman Sachs Group Inc. The win extends the tenure of a government that has delivered record economic growth and lifted investment to an all-time high. “It is going to bring a lot of confidence to local as well as overseas investors,” said Parthasarthi Mukherjee, treasurer at Axis Bank Ltd, in Mumbai. “Asset prices will rise as the negative element that was priced in will get reversed; reforms will be re-initiated and that process would be smoother and quicker this time.”
The rupee has advanced 8.2% against the dollar since the Congress proposed Singh as its candidate for Prime Minister on 18 May 2004. The rupee gained the most since 19 January 1998 on Wednesday, to the strongest since 12 May.
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First Published: Wed, Jul 23 2008. 10 39 PM IST