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Rupee fall expected to lift infotech, pharma sectors

M P Joshi in Bombay

The fall in the rupee's value against US dollar will give a boost to the stock markets. Export-oriented sectors' shares are expected to stage a rally, say analysts and fund managers.

Officials at the Jardine Fleming Asset Management Company said that though the fall in rupee was being attributed to the political uncertainty at the Centre, in fact, today's fall was expected after Finance Secretary Vijay Kelkar's statement asking for further cuts in the interest rates.

JFAMC analysts said that the lower interest rates had always benefited the capital market, while the rupee depreciation will certainly boost market sentiment in the infotech shares.

However, the depreciation of the rupee should be in an orderly and fashioned manner, only then will it have a positive impact on sectors like pharma (bulk drugs), software and other export-oriented industries, they added.

The rupee, which witnessed a quiet trade for the last couple of months, fell sharply today by 25 paise against the American greenback, following panic covering by importers in the fear of major political crisis. The rupee closed at Rs 42.68/70 as against the previous close of Rs 42.44/46. The day's low was Rs 42.76/78.

The RBI is believed to have pumped in $ 40-50 million to arrest the rupee's fall.

Top officials at Kotak Mahindra Mutual Fund Limited said that the fall in the rupee against dollar will introduce nervousness in the market in short-term. However, it would be a positive thing for the stock markets in the long run.

They also opined that the fall in the rupee value will boost sentiments on the infotech counters.

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