The benchmark Sensex on Tuesday soared 297 points to scale the key 35,000-level amid strengthening of the rupee and a good start to the corporate earnings season. The rupee climbed 35 paise to end at a nearly two-week high of 73.48 per dollar as crude oil prices softened and concerns over the trade deficit eased.
The 30-share Sensex stayed in the positive zone during the session and shuttled between 35,215.79 and 34,913.06, before settling 297.38 points or 0.85 per cent higher at 35,162.48. The NSE Nifty after regaining the 10,600-mark hit a high of 10,604.90 on the back of widespread gains, and finally concluded 72.25 points or 0.69 per cent higher at 10,584.75.
“Markets maintained a positive momentum as healthy start to the earnings season and gaining strength in rupee supported the sentiment. Though rally was broad based, financials led from the front. Earnings season will dictate the trend in the market as investors are gradually shifting their focus from global volatility to domestic triggers,” Vinod Nair, head of Research, Geojit Financial Services said.
Analysts said after a recent meltdown in line with the global sell-off, domestic markets are back on track ahead corporate results. Shares of the country’s second largest IT company, Infosys fell 0.39 per cent after cautious investors trimmed their positions ahead of July-September quarter earnings. The sentiment got support from other Asian markets which rose modestly after a week of heavy losses, although cooling factory-gate inflation in China and increasing tensions between Saudi Arabia and the West have capped gains.
VK Sharma, head, PCG & Capital Markets Strategy, HDFC Securities, said dollar selling by central bank through public sector bank supported the rupee further. “Yields on the 10-year government bond fell for the fifth session, hitting a three-week low after India’s trade deficit data narrowed to a five month low. The 10-year gilt yield reached 7.87 per cent from its previous close of 7.92 per cent. The RBI is going to buy Rs 12,000 crore rupees of bonds via open market operation on Wednesday. This would be the part of a plan to buy Rs 36,000 securities in October,” Sharma said.
Softening crude oil price from the recent highs and consumer price inflation have reduced policy tightening expectations. Brent crude oil, which last week surged above $86.7 a barrel for the first time in nearly four years, is now placed around $80, he said.
The broader markets depicted a firm trend as investors raised bets on hopes of encouraging earnings. The small-cap index rose 1.88 per cent and mid-cap index by 1.03 per cent. Buying was led by oil&gas, infrastructure, banks, PSU, capital goods, realty, auto and healthcare space counters. M&M emerged as the top gainer among Sensex constituents by rising 3.97, followed by Adani Ports at 3.54 per cent.
Meanwhile, the rupee opened on a firm note at 73.79 from Monday’s close of 73.83. During the day the domestic currency gained further ground to hit a high of 73.47 against the US dollar, driven by selling of the greenback by exporters. The domestic unit settled the day up by 35 paise or 0.47 per cent at 73.48 to the dollar, the highest closing level since October 3. The rupee had lost 26 paise to close at 73.83 Monday.