Sensex Up 220 Points, Nifty Gains; Key Factors Driving Positive Sentiment In Stock Market

The domestic equity market rebounded amid firm global cues, with ease in US bond yields and buying in banking heavyweights. Last seen, the BSE Sensex, the 30-share index, was trading 221.17, or 0.29 per cent, higher at 76,791. The index started the session with a decent gap-up at 76,724.95, compared to the last close of 76,570.35.

Meanwhile, Nifty50 was quoted at 23,972.75, up 0.24 per cent or 58.30 points.

Market Rebounds: Key Factors 

• A slight decrease in U.S. bond yields has helped improve market sentiment.
• There has been a significant mobilisation of $136 billion under the concessional swap facility, which is a positive development for the rupee.
• The $127 billion mobilised under the FCNR(B) scheme exceeded consensus estimates, which is expected to help improve banks' Net Interest Margins (NIMs) and benefit banking stocks.
• he stabilization of the rupee and improving growth and earnings prospects are expected to impart confidence to Foreign Institutional Investors (FIIs), encouraging continued buying.

“The market sentiment is likely to look up today following the slight easing of the U.S. bond yields. A big positive from the rupee perspective is the huge mobilisation of $136 billion under the concessional swap facility. The $127 billion mobilised under the FCNR(B) scheme has come way above the consensus estimates," said Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

"The implication of this from the market perspective is that the rupee will stabilise, imparting confidence to FIIs. With improving growth and earnings prospects, FIIs are likely to continue buying in India, despite the elevated U.S. bond yields. Also, the huge FCNR(B) mobilisation by banks will help improve their NIMs. This is positive for banking stocks," the analyst added.  

Rupee Appreciates: FCNR(B) Plays Key Role 

The rupee rose 47 paise to 94.26 against the US dollar in early trade on the back of better-than-expected FCNR (B) deposit collections.

Forex traders said the rupee's fluctuations reflected strong internal flows and strong RBI intervention to mitigate the adverse impact of higher crude oil prices and global output.

The Interbank Foreign Exchange (IBF) opened at 94.30 against the US dollar, then touched 94.26, up 47 paise from its previous close.