Fabulous Friday: Sensex sails past 56,000 closing level, rupee gains 53p

With equity benchmark indices scaling new closing highs and rupee logging its biggest single-session gain in more than four months, last Friday of this month turned out to be fabulous for markets

With equity benchmark indices scaling new closing highs and the rupee logging its biggest single-session gain in more than four months, the last Friday of this month turned out to be fabulous for Indian markets.

The domestic equities surged even as global markets traded mixed as investors awaited cues from the Jackson Hole Economic Symposium of central bankers, where more clarity is likely to emerge on whether loose money approach would continue for a longer period.

The 30-share BSE Sensex settled 175.62 points or 0.31 per cent higher at its new closing peak of 56,124.72. Similarly, the broader NSE Nifty gained 68.30 points or 0.41 per cent to finish at a record 16,705.20.

The Indian rupee, which was range-bound for the whole week, logged its biggest single-session rise in over four months and ended the day higher by 53 paise at 73.69 against the US dollar.

The trend was mainly fuelled by dollar sales by foreign banks amid anticipated inflows.

Experts believe that with the initial public offer of state-owned LIC, BPCL disinvestment and asset monetisation plans, there could be more inflows into the domestic markets.

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, said traders took some comfort from a report stating that hiring activity witnessed an overall 4 per cent sequential growth in July and the uptick was mainly spread across metros.

Sentiments were also boosted after RBI Governor's statement that it will not surprise the market with a sudden rate hike and all monetary policy actions would be carefully calibrated. The current inflation trajectory looked transitory, Solanki added.

For the week, benchmark Nifty climbed over 1.5 per cent while investors' wealth increased significantly at over Rs 5.5 lakh crore during the week, Binod Modi, Head - Strategy at Reliance Securities, said.

The lack of strong selling enthusiasm at new highs has resulted in range-bound action for the equity market, traders said and pinned hopes on further upside in the short term.

"This is a positive indication and there is a possibility of further upside in the short term. The next upside levels to be watched are around 16,900 by next week. Immediate support is placed at 16,550 levels," Nagaraj Shetti, Technical Research Analyst at HDFC Securities, said.

Experts also opined that a sharp improvement in key economic indicators like GST collection, auto sales volume despite supply disruption, and other high frequency indicators like e-way bills, power consumption and strong import-export growth in July indicate sustainable rebound in corporate earnings in subsequent quarters.

This should aid the market to sustain premium valuations, they added.

Additionally, minutes of the Monetary Policy Committee (MPC) meeting held in the beginning of this month showed RBI's commitment to ensure policy support to sustain economic recovery.