Stocks rally on rupee recovery

Mumbai: The equity markets snapped their six-day losing streak as a mild recovery in the rupee improved sentiments on the domestic bourses. 

Experts said that the markets were already in an oversold territory due to which short-term traders who had created bearish bets on the markets squared off their positions following the expiry of the September derivative series. 

After slipping below the 9,700 level mark in the intra-day trade, the Nifty registered a smart recovery to end the trading session at 9,768.95, up 33.20 points or 0.34 per cent. 

The Sensex rose 122.67 points or 0.39 per cent to end the day at 1,282.48. Meanwhile, the rupee appreciated 0.31 per cent to 65.50 per dollar from its previous days close of 65.72. 

While the sharp bounce back came as a relief for investors, market participants said that the underlying sentiments still remains weak due to which the markets are likely to see fresh selling at higher levels. 

According to the provisional data, foreign portfolio investors (FPIs) sold `5,328.46 crore worth of equities on Thursday. 

“Technically, markets were deeply oversold and hence, the Nifty did not have the impetus to break the recent swing low of 9685.55. Having said that one needs to understand that the short-term tide for market has turned and any relief rally in coming days is likely to get sold into. Going ahead, 9,820– 9,890 would be seen as a sturdy wall for the index. Traders are advised to stay light and not to get carried away by such bounce backs,” said Sameet Chavan, chief technical & derivative analyst at Angel Broking.   

The broader markets also participated in the relief rally with 1,531 stocks traded on the BSE closing the day higher as compared to 987 stocks that declined.