Sensex closes at highest in nearly a week; FII flows key

The index gains 39 points to end at 18,558

The BSE Sensex rose on Monday to close at its highest in nearly a week, with Sesa Goa surging a day ahead of its inclusion in the benchmark index. Information Technology (IT) stocks rose on hopes of better realisations as the rupee resumed its fall against the dollar.

The rupee weakened, tracking offshore rates as sustained foreign selling in equities continued to raise concerns about the gaping current account deficit. Fitch Ratings also said it was getting more challenging for India to meet its fiscal deficit target in the current financial year ending March 2014, with revenues slowing.

Traders remain wary about foreign flows after investors abroad sold about $720 million of shares in the previous six sessions through Friday, ahead of June quarter GDP data and the expiry of August derivatives contracts this week.

The benchmark BSE Sensex rose 0.2 per cent, or 38.69 points, to end at 18,558.13, to mark their third consecutive day of gains. The broader Nifty rose 0.09 per cent, or 4.75 points, to end at 5,476.50 - its highest close in nearly a week. Sesa Goa Ltd surged 9.6 per cent ahead of its inclusion in the BSE Sensex.

IT shares rose on hopes of better realisations as the rupee continued to weaken against the dollar, after a sharp rise in the previous session. Infosys Ltd rose one per cent, Tata Consultancy Services gained 0.7 per cent, while Wipro ended 2.4 per cent higher.

Hexaware Technologies ended 6.1 per cent higher after Baring Private Equity Asia agreed to buy a controlling stake in it for about $420 million. L&T gained one per cent after Barclays upgraded the stock to overweight, citing a potential recovery in earnings and valuations. RIL gained 0.4 per cent, adding to Friday's 1.7 per cent rise after it and British oil company BP Plc announced a new gas condensate discovery off the east coast of India, in the Cauvery basin.

However, among stocks that fell, IDFC Ltd slumped 8.7 per cent after the Reserve Bank of India on Friday cut the limit that foreign investors can own in the infrastructure lender to 54 per cent from 74 per cent without giving a reason.

Oil and Natural Gas Corp fell 3.1 per cent after it agreed to buy 10 per cent in a gas field offshore Mozambique from Anadarko Petroleum Corp for $2.64 billion, as the explorer looks to offset diminishing supplies from domestic gas fields by buying overseas assets.