Rupee jumps 85p, Sensex rises 219 pts after PM's hard-talk

The rupee today soared 85 paise to 65.70 against dollar and the Sensex jumped nearly 219 points to over two-week high levels after Prime Minister Manmohan Singh promised not to resort to capital controls or reverse economic reforms to tackle turbulence in markets.
The financial markets lapped up his detailed statement in Parliament where he appealed for a political consensus to put the economy back on high-growth trajectory. Singh also said government would make every effort to maintain a macro economic framework friendly to foreign capital inflows to enable orderly financing of the current account deficit.
The rupee settled at day's high of 65.70, showing a rise of 85 paise or 1.28 per cent on dollar selling. Yesterday, it spurted by 225 paise -- the most in at least 15 years -- after the RBI opened a forex swap facility for PSU oil firms.

After plunging to record low of 68.85 on August 28, the rupee has rebounded 310 paise, providing much-needed relief to the economy which grew at 4.4 per cent in the June quarter, the slowest pace in at least four years. The GDP data came after the markets closed today.
Stocks rose for the third day with the S&P BSE benchmark Sensex firming up by 218.68 points to settle at 18,619.72 -- the highest level since August 14. Receding fears of an attack on Syria after British lawmakers voted against military action, which had kept global oil prices under pressure, also aided domestic sentiments.

The US economy expanded more rapidly than previously thought in the second quarter. The US Fed has indicated that tapering of its stimulus programme could start as early as September on improving US economic data.
Critics have recently focussed on the government's failure to revive GDP growth, assuage fears of foreign investors and cap expenditure on programmes like providing cheap foodgrains to poor people ahead of the 2014 polls.
Meanwhile, gold prices fell further by Rs 625 to Rs 31,700 per ten grams, extending losses for the second straight day in the national capital today on sustained selling by stockists.