Domestic stock markets ended over 2 per cent higher on Tuesday, helped by recovery in global markets, while the rupee also saw an appreciation.
- Advertisement -
While the 30-share Sensex at the BSE surged 1,276.66 points, or 2.25 per cent, to close at 58,065.47, the broader NSE Nifty jumped 386.95 points, or 2.29 per cent to end at 17,274.3. On Tuesday, foreign institutional investors bought Rs 1,344.63 crore worth of shares from domestic capital market on a net basis, the BSE’s provisional data showed.
Meanwhile, the rupee gained 29 paise against the greenback to close at 81.53, compared to the previous close of 81.82.
The currency opened strong at 81.66 against its US counterpart, touching an intra-day high of 81.36 and a low of 81.66, before ending the day at 81.53.
- Advertisement -
Forex dealers said the rupee appreciated as the dollar index fell and there was a pullback in the US yields. The surge in the domestic stock market too helped the rise in the currency.
Explained
Boost from US data
- Advertisement -
Market participants said the recovery in the US markets on Monday’s trading session led to a positive momentum in the international markets.
“Asian and European stocks rallied after Wall Street soared overnight, fuelled by hopes that weakening US economic data would lead to a change in global central bank policy,” said Deepak Jasani, head of retail research, HDFC Securities.
US manufacturing activity grew at its slowest pace in nearly 2.5 years in September as new orders contracted, likely as rising interest rates to tame inflation cooled demand for goods.
- Advertisement -
The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points as against the expected 50 bps. Britain’s decision to ditch part of a controversial tax-cut plan and slightly paler expectations for aggressive central bank action returned some confidence to investors.
- Advertisement -
“In the international markets, the bond yields cooled off and the dollar index came off its highs, which led to a pullback move in the equities as a lot of short positions were intact in the system some of which came to cover up,” said Ruchit Jain, lead-research, 5paisa.com.
Volumes on the NSE were surprisingly low compared to recent averages. Among sectors, metals, power, IT, banks, capital goods and realty were the main gainers, Jasani added.
Analysts said markets will continue to take cues from global peers in the near term. “Over the near term, US economic data like ISM services and US NFP report will provide direction. We expect a range of 81.20 and 82.00 on spot (rupee),” said Anindya Banerjee, vice president—currency derivatives & interest rate derivatives, Kotak Securities.
Meanwhile, as per a Reuters report, the Nasdaq led Wall Street higher on Tuesday, powered by megacap growth and technology stocks as US Treasury yields dipped.
At 12:52 p.m. ET, the Dow Jones Industrial Average was up 713.98 points, or 2.42 per cent, at 30,204.87, the S&P 500 was up 96.88 points, or 2.63 per cent, at 3,775.31, and the Nasdaq Composite was up 315.72 points, or 2.92 per cent, at 11,131.15.
