A sharp recovery in the rupee had a

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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.)