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Stock Analysis, IPO, Mutual Funds, Bonds & More

Rupee rally earns Indian market tag of best performer

, ET Bureau|
Updated: Dec 27, 2018, 08.57 AM IST
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Highlights

  • India has been the best-performing market in the past three months among the top 15 markets
  • The performance has also been boosted by the sharp rise of the Indian rupee against the US dollar
  • Since the beginning of the year, the Nifty is up 3 per cent but is down 6.5 per cent in dollar terms
Indian indices and select heavyweight shares continue to do well in dollar terms, thanks to the rupee’s robust rally since the October lows. With USD-to-INR closing at the highest level in the past four months (rupee closed at 70.08), dollar returns continue to outpace rupee returns for the Nifty and select index heavyweights for the week ended December 26, though returns in local currency are much higher year-to-date given the volatile currency market till October.

In dollar terms, India has been the best-performing market in the past three months among the top 15 markets, thanks to strong performance of heavyweights such as HUL, Bajaj Finance, ICICI Bank, HDFC, L&T and Maruti Suzuki.

The performance has also been boosted by the sharp rise of the Indian rupee against the US dollar. The Nifty has gained 4.2 per cent in absolute terms since October 9 — when the rupee hit a low of 74.4 against USD — and in dollar terms, it has risen 10.5 per cent.

Since the beginning of the year, the Nifty is up 3 per cent but is down 6.5 per cent in dollar terms. This supressed returns in dollar is due to the fall in the rupee in the first nine months (till October 9). Dollar-to-rupee fell from 64.6 in the beginning of January to 70.08 currently. However, the recent bounceback in the rupee has erased a part of the loss.

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Foreign investors which own 45 per cent of the Nifty’s free float track market performances in dollar terms as it offers a level-playing field in evaluating global markets. Given this, they are sitting on a huge profit for their dollars invested in India.

India and Indonesia have seen major gains since their currencies started recovering after August-October rout. India has gained 10.5 per cent since October 9, while Indonesia has gained 10.3 per cent. Major EM indices such as Hang Seng, Brazil, Shanghai and Singapore have fallen. US, France, Germany, UK and Japan markets are down 11 per cent to 19 per cent.

ETIG analysis shows that since the bounceback in the rupee from October 9, Bajaj Finance has been the top gainer among the top 15 FII heavyweights with 32 per cent dollar return (24.4 per cent rupee gain). HUL gained 25 per cent (18 per cent rupee gain) during the same period and ICICI Bank with 22.6 per cent returns (15.5 per cent rupee gain) is the third highest gainer. All the stocks among the 15 heavyweight stocks have given positive returns in dollar as well as rupee except IT stocks, which have continued their downward trend of the past few weeks. TCS, Infosys and HCL tech which are down 3 per cent to 7 per cent in dollar term and 8 per cent to 12 per cent in rupee term.


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