Indian equities extended their rebound for a second straight session. Benchmark indices closed firmly higher as a stronger rupee, renewed foreign inflows and supportive global cues lifted investor sentiment.
The Sensex jumped 638 points, or 0.75%, to settle at 85,567, while the Nifty 50 gained 206 points, ending the day at 26,172. Over the last two sessions, the Sensex has added nearly 1,100 points, signaling a clear revival in risk appetite after last week’s volatility.
So, what drove today’s rally?
First, the rupee bounce.
The Indian rupee strengthened sharply in early trade, rising 22 paise to 89.45 against the dollar, helped by renewed foreign inflows and firm intervention by the Reserve Bank of India. This comes after the currency had briefly slipped past the 91-per-dollar mark earlier this month. The rupee’s recovery has eased pressure on equities, especially import-heavy sectors.
Second, FIIs are back in buying mode.
Foreign institutional investors have now turned net buyers for three consecutive sessions. On Friday alone, FIIs bought shares worth over Rs 1,800 crore, while domestic institutions added a strong Rs 5,700 crore, reflecting broad-based institutional support.
According to Dr. VK Vijayakumar of Geojit Investments, the sharp reversal in the rupee and FIIs turning buyers are mutually reinforcing trends that could trigger short covering and push markets higher. However, he cautions that rich valuations may cap the upside, even as earnings growth prospects remain supportive.
Third, global cues remained favourable.
Indian markets tracked gains across Asia, following a technology-led rally on Wall Street. S&P 500 and Nasdaq futures edged higher, while Asian markets also advanced, Japan’s Nikkei jumped 1.5%, and South Korean stocks surged nearly 2%, driven by optimism around AI-linked earnings.
And finally, technical signals are turning constructive.
From a chart perspective, analysts say the Nifty appears to be stabilising after weeks of decline. Anand James of Geojit notes that the index is holding above recent lows, opening the door for a possible move toward 26,300. However, a slip below 25,980 could lead to consolidation, while a break under 25,650 may signal deeper downside.
Bottom line:
A stronger rupee, returning foreign flows and supportive global trends have given markets fresh momentum but valuations remain a key watchpoint.
That’s all for now.
You’re listening to ET Market Watch. I’m Neha Vashishth. Stay tuned.
