Weekly Wrap: Sensex gains 3.5% as rupee rebounds from historic lows

The rupee's strong recovery against the U.S. dollar following a slew of announcements by the new RBI governor Raghuram Rajan that were aimed at curbing forex volatility and spur economic growth, sent stock prices soaring on three of the five sessions during the week ended 6 September 2013.
The BSE benchmark Sensex breached the psychological 19,000 mark and ended with a gain of around 650 points or 3.5% at 19270. The broader 50-stock Nifty index of the National Stock Exchange closed up 202 points or 3.7% at 5674. With several midcap and smallcap stocks too moving higher, the BSE Midcap and Smallcap indices gained around 2.9%.
The rupee, which had tumbled to 68.85 against the greenback on 29 August, bounced back sharply and was quoting around 65.30 towards the end of the session on Friday (6 September).
It was a rousing start for the market last week, with strong global cues lifting the Sensex by around 266 points or nearly 1.5% on Monday.
However, stocks tumbled on the following session as the rupee plunged against the greenback, hurting sentiment to a significant extent. The Sensex went down by as much as 651 points that day, with several top notch stocks, particularly from the banking space, suffering sharp losses.
The rupee's recovery and easing worries on the Syrian front wooed investors back to the ring on Wednesday, and resulted in the Sensex vaulting by 333 points or 1.8%.
Stocks extended their gains on Thursday, after the RBI governor announced plans to bolster the financial sector and stabilize the rupee. The Sensex spurted 412 points or 2.2% that day.
And then, it was a nice ride up the charts for stocks on Friday as well, with a stable rupee prompting investors to indulge in more buying in blue chips. The Sensex ended the day with a gain of around 290 points or a little over 1.5%.
ONGC shot up by almost 16%. Reliance Industries, ITC, GAIL India and Oil India moved higher. Shares of state run oil marketing firms BPCL, Hindustan Petroleum Corporation and Indian Oil Corporation too saw some good spells in positive territory.
Bank stocks rose sharply after the RBI governor outlined plans to attract more funds from overseas by subsidising hedging costs for banks and making it easier for importers and exporters to hedge currency risk. He also outlined the plan to attract more funds from non-resident Indians as part of a broader push to lure inflowsm, saying the central bank woul offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians.