Mumbai: The equity markets bounced back sharply on Friday as the US dollar retreated from its 14-year high triggering a strong rally in most of the emerging market equities. The Sensex vaulted 456.17 points or 1.76 per cent to close the day at 26,316.34 while the Nifty jumped 148.80 points or 1.87 per cent to end the day at 8,114.30. The Indian rupee too recovered from its 37-month low lifting investor sentiments.

The severe weakness in rupee experienced during the last few days saw significant amount of buying interest in IT and pharma sector stocks as they derive a major portion of revenue from the overseas market.

The shares of IT bellwether TCS and Infosys Ltd were the biggest gainers among the Sensex constituents up 5.23 per cent and 4.78 per cent while the stocks of pharma majors Sun Pharma and Lupin surged 4.18 per cent and 3.09 per cent respectively.

However, FPIs continued to shy away from the Indian markets as the sharp rally in US bond yields during the last two weeks has reduced the arbitrage opportunities for short term investors.

According to the provisional data released by the stock exchanges, FPI’s sold shares worth Rs 372 crores on Friday.

“Stocks across Asia surged, as the Thanksgiving holiday in the US, stalled the dollar’s recent relentless surge. Technology and healthcare stocks were in high demand on Friday as a depreciating rupee is positive for these export oriented industries,” said Karthikraj Lakshmanan, senior fund manager – equities, BNP Paribas Mutual Fund.