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Business EYE AUGUST 27, 2021 | The Indian Eye 30

mixed signals as Sensex booms, rupee gains

but manufacturing scrambles amid Covid-19

Investors trimmed bearish bets on most Asian currencies as the dollar weakened on

hopes of a temporary pushback in the Federal Reserve’s tapering timeline

Our Bureau one’s yet doubting its potential
to pull off the world’s fastest
Mumbai/New Delhi pace of growth among major

here are signs of recov- economies this year.
ery but there are also Unlike China, which saw
Tsigns of struggle. The In- workers move en masse from
dian economy is booming and farms to factories, India tran-
hobbling at the same time. sitioned into a services econo-
On Friday, equity bench- my -- with the sector providing
mark Sensex surged over 175 more than 32% of overall em-
points to close at its new life- ployment as of 2020, up from
time high, boosted by gains in 17% in 1981.
TCS, L&T and HDFC amid a At the same time, the share
largely subdued trend in glob- of agriculture in jobs dropped
al markets. The 30-share index to 42% from 72% and manu-
settled 175.62 points or 0.31 facturing has plateaued at 25%.
per cent higher at 56,124.72. Boosting labor force pro-
Similarly, the broader NSE ductivity is the key to faster eco-
Nifty gained 68.30 points or A man poses for photograph with the bull statue outside the Bombay nomic growth for India, which
0.41 per cent to finish at a re- Stock Exchange in Mumbai (ANI) is recovering from an unprece-
cord 16,705.20. dented contraction brought on
UltraTech Cement was the tral bank. In the domestic bond mar- by the pandemic.
top gainer in the Sensex pack, The market was focused this ket, the benchmark 10-year Data due on August 31 will
surging over 3 per cent, fol- week on the Fed’s signals at the bond yield ended steady on the likely show that gross domestic
lowed by L&T, Dr Reddy’s, Ba- Jackson Hole conference, but day but rose 2 bps on the week. product grew 21% in the April
jaj Finserv, Sun Pharma, TCS analysts now doubt whether But everything is not hunky to June quarter from a year ago,
and Kotak Bank. On the other the central bank’s boss will pro- dory in Indian economy. For setting the stage for an expect-
hand, Infosys, IndusInd Bank, vide hints about the timing of decades, the services industry ed 9.5% full-year expansion.
M&M, Nestle India and HCL tapering. powered India’s growth and But India has repeatedly
Tech were among the laggards. Most other Asian currencies tempered unemployment in failed to grow its manufactur-
Also, the rupee saw its big- and shares, however, weakened the world’s second-most pop- ing base despite demand from
gest weekly gain in four months as traders cut risk exposure ulous nation. The coronavirus a captive market of more than
on Friday as investors unwound ahead of Powell’s speech. pandemic is now leading to 1.3 billion people. It has instead
long dollar positions ahead of Investors trimmed bearish calls for an urgent rebalancing relied on a flood of imports for
US Federal Reserve chairman bets on most Asian curren- of the economy toward manu- everything from heavy machin-
Jerome Powell’s Jackson Hole cies as the dollar weakened on facturing. ery to toys. Even Prime Min-
speech. The partially convert- hopes of a temporary pushback High-contact services jobs ister Narendra Modi’s ‘Make
ible rupee ended the session at in the Federal Reserve’s taper- from airlines to hotels and malls in India’ initiative to boost
73.68/69 per dollar, better than ing timeline, while sentiment to multiplexes were the first to manufacturing to 25% of the
Thursday’s close of 74.2150. on the rupee turned marginally collapse amid protracted lock- economy has floundered in
The unit rose 1% on the week, bullish, a Reuters poll showed downs aimed at containing the the absence of supporting in-
its best since the last week of on Thursday. virus. The decline of the sector, frastructure and ease of doing
April. “We expect RBI to remain which typically accounts for business.
The Reserve Bank of In- proactive with its FX interven- 55% of the economy, is forc- “There was sudden pres-
dia (RBI) did not come in too tion strategy to ensure limited ing people to seek work on ru- sure to cut dollar longs in af-
strongly either to prevent ru- volatility in the rupee, and con- ral farms or in the undersized ternoon trade as investors are
pee appreciation due to small tinue to forecast the rupee to manufacturing industry. not certain the Fed will end
market flows, the trader said, end the year at 75 versus dol- The economy’s resilience up announcing anything con-
adding that sporadic dollar lar,” Kaushik Das, chief India will be tested by its ability to crete on asset purchase taper
buying by state lenders could economist at Deutsche Bank, overcome a devastating out- tonight,” a senior trader at a
have been on behalf of the cen- wrote in a note. break of Covid-19, although no private bank said.

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