NEW DELHI: The S&P BSE Sensex pared gains of over 100 points from day's high in afternoon trade on Friday as rupee continued its slide against the US dollar.
Erasing all initial gains, the rupee weakened further to 60.45 (intraday) in afternoon trade on fresh dollar demand from African bank since Thursday, Reuters reported.
Indian rupee has been the victim of rising dollar demand and narrowing spread between the US and Indian bond yields. It has plunged 1.8 per cent in a matter of just 5 days and is Asia's worst performer this week.
A weak currency can make the situation worse for India as well as for markets. Given the fact that we import more, a weak rupee will put huge dent in our current account deficit ( CAD) numbers.
At 02:15 p.m.; the 30-share index was at 19509.98, up 98 points or 0.5 per cent. It touched a high of 19,640.27 and a low of 19,504.01 in trade today.
The Nifty was at 5865.90, up 28 points or 0.50 per cent. It touched a high of 5,900.45 and a low of 5,863.00 in trade today.
"It is very hard to say that rupee has topped out already and the reason for that is that the world is coming to grips with this new reality that the FED has announced on the world saying that they will be tapering for sure," said Ajay Mahajan, Managing Partner, R-Square Advisors in an interview with ET Now.
"We can argue that the markets have perhaps in the short term overreacted to that. Large EMs outflows have happened and this is due to the fact that FIIs are rebalancing their portfolios worldwide," he added.
Mahajan is of the view that the rupee should stabilise in the region of 57-58 against the USD in near term.
The BSE Mid-cap index was trading 0.11 per cent higher, while the BSE Small-cap index was up 0.31 per cent.
Among the sectoral indices, the BSE Oil & Gas Index rose 1.2 per cent, followed by the BSE FMCG Index which moved 0.83 per cent higher.
The BSE Banking Index gained 0.56 per cent, followed by the BSE Capital Goods Index was up 0.4 per cent and the BSE Metal Index was trading 0.24 per cent higher.
The BSE Realty Index was trading 0.4 per cent lower, the BSE Consumer Durable Index moved 0.41 per cent lower and the BSE Power Index was down 0.11 per cent.
Jindal Steel (2.8 per cent), ONGC (2.4 per cent), HDFC Bank (2.1 per cent) and Tata PowerBSE 1.35 % (1.4 per cent) were among top Sensex gainers.
Bharti AirtelBSE -1.81 % (2 per cent), GAIL (1.3 per cent), M&M (0.89 per cent) and Coal India (0.32 per cent) were among top Sensex losers.
European shares consolidated ahead of the key US jobs report making investors reluctant to extend the previous day's strong rally.
The FTSEurofirst 300 was flat at 1,179.02 points. The index rallied 2.4 per cent on Thursday in its best showing in 11 months.
