Good News Comes In Economy Pack, More May Be On Way Rupee in 63 zone, 727-point sensex rise sharpest in 4 years Positive Signs At Home & Abroad Cheer Markets

Mumbai: The rupee gained 142 paise to appreciate to 63.84 and the sensex jumped 727 points (the highest one-day rise since the 2,111-points rise on May 18, 2009) to close three points short of the 20,000-mark as a series of positive news sharply improved sentiment in the markets. The forex and equity markets opened stronger on the back of the Reserve Bank of India's weekend measures and gained steadily on news of improved balance of trade. On the global front, Syria appeared to have averted a potential US strike by agreeing to hand over control of its chemical weapons and China reported a better-than-expected 10.4% jump in industrial output. 

    "Today's appreciation of the rupee was largely sentiment driven. Some of the fundamental issues are still there. But the rupee should open strong tomorrow as some of the late global news has also been positive," said Ashutosh Raina, head, forex trading, HDFC Bank. He added that even at present levels the rupee continued to be undervalued. "Technically, 63.30 is a strong support level for the rupee. We have to see if it breaches this level on Wednesday." 
    The rupee has gained in the last four consecutive trading sessions, which coincide with the start of new RBI governor Raghuram Rajan's tenure. Rajan has announced a host of measures, which include subsidizing the cost of hedging dollar deposits for banks and giving foreigners more freedom to buy shares. Oil prices fall nearly 2% on Syria's offer 
Mumbai: News that Syria had accepted Russia's proposal to give up control of its chemical weapons, averting a US strike, led to a fall in oil prices on Tuesday. Brent crude on ICE Futures Europe was off $2.14, or 1.9%, to $111.07 a barrel. Oil prices have been a big drag on the Indian economy as it is one item where imports do not decline as prices rise. 
    India's exports rose to a twoyear high of 13% in August on account of the improved global situation, enabling trade deficit to fall to a four-month low of $10.9 billion from $14 billion in August 2012. "A significant decline in gold imports and weak capital and consumption goods' imports, due to subdued domestic demand, will help lower growth in non-oil imports during this year. Lower merchandise trade deficit, along with a healthy growth in IT/ITes exports, could help in bringing India's current account deficit in 2013-14 to even below our current forecast of 4.2% of GDP," said Crisil in a statement. 
    On Tuesday, after Monday's holiday on account of Ganesh Chathurthi, the sensex opened below 19,450 and gained steadily to close at 19,997—up 727 points or 3.77% from its previous close on Friday.

TERRIFIC TUESDAY TRIGGERS TURNAROUND TALK 
Sensex rises 727 pts — the sharpest single-day increase since May 2009 — as US offer to defer attack on Syria and Chinese economic data lift sentiment 
The rupee closed at 63.84, up 5 since hitting a historic low of 68.85/$ on Aug 28 
Exports grew nearly 13% in Aug, helped trim trade deficit to $10.9bn compared to $20bn a few months ago. Lower trade deficit augurs well for current account deficit and rupee 
Car sales rose over 15% in Aug, reversing a 9-mth falling trend 
Hiring survey showed Indian employers positive about hiring in next quarter 
There were gains for govt bondholders too as prices rose 
In Delhi, gold prices gained by 270 to 31,370/10gm. In global markets, price dropped 
WHAT TO WATCH OUT FOR US Fed Reserve's Sep 18 statement is being keenly tracked to see if it will begin withdrawing the stimulus Situation in Syria will have impact on global markets, commodity prices. A resolution would boost markets Oil prices have risen. A spike will affect fiscal maths Industrial production and inflation data due to be released in next few days. Will be keenly watched Outcome of the elections in Germany will be critical for EU