Stock indices gain 1% on buying momentum, FPI inflows spur rupee by 23 paise

Benchmark equity indices gained about 1% on Monday backed by heavy buying across sectors and in line with global cues. The rupee appreciated 18 paise on positive FPI flows.

The S&P BSE Sensex surged 545.25 points, or 0.95%, to 58,115.50 points. Top Sensex gainers included M&M (6.15%), Reliance Industries (2.64%), Maruti (2.64%), Kotak Bank (2.42%) and Bharti Airtel (2.4%).

The NSE Nifty-50 index too cimbed 181.80 points, or 1.06%, to 17,340.05 points. Tata Motors was the top performer at Nifty with a gain of 6.77%.

“We have witnessed a promising start for the new week, wherein the initial hiccup got decisively bought into by the bulls, and the uptrend continued,” said Osho Krishan, senior analyst, Technical & Derivative Research, Angel One Ltd.

“The optimism across the global bourses has spread buoyancy to our market, resulting in broad-based buying interest. The bulls have taken complete control of the market, which is quite evident on the technical chart with its higher highs – higher lows formation,” he added.

The rupee also appreciated 18 paise to 79.06 on Monday.

“USD-INR [US dollar Rupee] spot closed 18 paise higher at 79.06, thanks to FPI flows turning positive and some carry trade interest,” Anindya Banerjee, VP, Currency & Interest Rate Derivatives at Kotak Securities Ltd. “Improvement in forward premium has brought exporters into the market,“ he added.

“At the same time, softness in the dollar overseas, improved growth outlook in India and uptick in forward premium have attracted carry traders into the market, who go long [on the] rupee and short the US$. Over the near term, bias remains downward. We expect a broad range of 78.70 and 79.40 on spot,” he added.

Aditi Gupta, economist, Bank of Baroda, said global currencies edged up against a weaker dollar, and the rupee too ended the fortnight higher by 0.9% after depreciating to a fresh record low.

“Apart from the RBI policy meet, U.S. CPI and jobs report will guide the trajectory of the rupee in the coming two weeks. We expect the rupee to trade in the range of 79.15-79.75/$ in the next fortnight,” she said.