A sharp recovery in the rupee had a
ripple effect on stocks today leading to a relief rally as the
Sensex and the Nifty reversed their seven-day losing spell as
covering of shorts picked up on a day of derivatives expiry.
The domestic currency, which had hit six and a half month
low yesterday, managed to overcome its weakness after the
dollar weakened globally.
Since it was the last session for September futures and
options (F&O) contracts, speculators hit the ground running by
covering their short bets towards the close, which accelerated
the pace of recovery.
The Sensex quickly slipped into negative territory as
foreign funds continued to pull out capital, but emergence of
value-buying made sure the gauge settled higher by 122.67
points, or 0.39 per cent, at 31,282.48.
The 50-share NSE Nifty ended up 33.20 points, or 0.34 per
cent, at 9,768.95.
"Marginal rebound in rupee and short covering ahead of
expiry helped the market to close positive, while the caution
on economic slowdown remains. Gradual rise in crude price and
muted expectation from RBIs upcoming monetary policy
influenced investors to stay on the sideline," said Vinod
Nair, Head of Research, Geojit Financial Services Ltd.
The 30-scrip BSE index had stretched its last 7-day fall
to 1,263.95 points, bogged down by concerns over foreign
outflows and the travails of the rupee.
There was a mixed trend in Asia at the close with a
higher opening in Europe.
US stocks were back in the recovery mode following
sweeping tax reforms plan unveiled by President Donald Trump.
But faultlines remained over North Korea's ballistic and
nuclear programme, which kept risk sentiment in check.
Kotak Bank was the smartest of the Sensex lot, surging
3.05 per cent. Dr Reddy's firmed up 2.62 per cent to Rs
2,367.85 after the company said it has received an
establishment inspection report (EIR).
Losses in Asian Paints, Reliance Industries, Wipro and
Bharti Airtel, however, squeezed the upside.
The BSE realty took the pole position among sectoral
indices, gaining the most by 0.91 per cent, followed by
banking and healthcare.
A similar pattern showed up in broader markets, where
the small-cap and mid-cap indices rose by up to 0.90 per cent.
There were no signs of change in trading preference of
foreign portfolio investors who net sold shares worth Rs
856.28 crore. Domestic institutional investors (DIIs) picked
up equities worth a net Rs 1,858.29 crore yesterday, according
to provision data.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)