Stock indices surged on Friday following a rally in information technology, realty and bank stocks after the announcement of Infosys results and the market regulator’s move to give opportunity for public to invest in real estate properties through the proposed Real Estate Investment Trusts (REIT).
The rupee also traded strongly against the dollar gaining 32 paise and closed at 61.07 on Friday compared to its previous close of 61.39. It touched a high of 61.01 intra-day at the inter-bank foreign exchange market.
The S&P BSE Sensex closed at 20528.59 with a gain of 255.68 points or 1.26 per cent. BSE’s IT stocks led the rally with a rise of 3.12 per cent followed by banks (3.09 per cent), capital goods (2.77 per cent), realty (2.66 per cent) and technology (2.56 per cent). However, it was not a broad-based rally as a number of sectoral indices ended in the red. Metal stocks lost the most with 1.49 per cent followed by power (1.10 per cent), healthcare (1.09 per cent), fast moving consumer goods (0.92 per cent), consumer durables (0.65 per cent) and PSUs (0.43 per cent).
On the National Stock Exchange (NSE), the 50-share Nifty gained 75.25 points or 1.25 per cent to close at 6096.20.
“Indian stock market and the rupee clocked gains over the last week. Nifty and Sensex gained close to 3 per cent and the rupee around a per cent against the dollar,” said Anindya Banerjee, Currency Analyst, Kotak Securities.
Mr. Banerjee said “signs of resolution in the U.S. debt ceiling impasse have also helped the rupee and stocks.”
Over the near-term, “keep an eye on the IIP and consumer inflation data from India as well as on the status of the U.S. debt ceiling debate. An early resolution in Washington can support the markets further.”
“We expect interest rate-sensitive stocks to remain favoured. Indian rupee can remain between 60.50 and 62.50 on the spot. We are hoping that the restrictions placed on the exchange traded currency derivatives to be lifted soon and once that happens, it can be a positive for FII sentiment towards India,” Mr. Banerjee said.
A weak dollar overseas and dollar sales by exporters also supported the rupee. Analysts said the local currency got a boost on reports that the government is in talks to include Indian debt in global indices.
“The rupee was seen strengthening against the U.S. dollar on account of positive news from the market that the government is in talks with global investment banks for including Indian bonds in global bond indices,” said Abhishek Goenka, CEO of India Forex Advisors.