Stocks, rupee bleed; gold becomes costlier ahead of Diwali

Mumbai: Global growth worries pulled down Indian stocks and rupee on October 16 while gold price surged in a festive dampener a week ahead of Diwali. Lingering concerns about US and Eurozone growth spooked stock markets on October 16 with Sensex plunging 350 points to end below 26,000 mark after two months and Nifty slumping 116 points to sub 7,800 level on across-the-board selling in the last hour of trade.

Similarly, the Indian rupee plummeted to 61.93 and closed 42 paise down at over seven-month low of 61.83 against the greenback on heavy capital outflows and a spike in demand for US dollars. Helped by risk-aversion and a weak rupee, gold prices rose further by Rs 190 to Rs 27,840 per ten grams in the national capital on October 16, on sustained buying by jewellers and retailers. It had gained Rs 70 in yesterday's trade.

"Gold prices made significant gains as equity markets faced a rout due to global growth fears," said  Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities. In Mumbai, standard gold price rose by a hefty Rs 370 to Rs 27,520. In Kolkata, gold (24 carat) rose by Rs 55 per 10 grams to Rs 27,940 while the precious metal for retail use (22 carat) became costlier by Rs 310 at Rs 25,970 in Chennai.

Gold imports are estimated to have jumped about five-times to around 95 tonnes in September, helped by spurt in demand in festival season. The rise in local gold prices comes as a dampener for the common man as September-November is a busy festival season.