Sensex rebounds; rupee falls to 68.33

Reversing its previous day’s losses, the flagship Sensex yesterday staged a modest comeback to end with paltry gain of about 48 points, buoyed by pick-up in the infrastructure sector in November coupled with firm global cues.The overall recovery also received some support from banking stocks which recouped their previous losses after being hit by profitability fears in the wake of lending rate cuts. Core industries grew 4.9% in November 2016 on the back of healthy performance by sectors, including coal, steel and electricity, prompting investors to go in for fresh bets.After a higher opening, the Sensex advanced to hit the day’s high of 26,724.40. But profit-booking towards the close made it shed some ground to touch a low of 26,488.37 before settling up 47.79 points, or 0.18%, at 26,643.24. The gauge had lost 31.01 points in the first trading session of 2017 on Monday.The NSE Nifty also moved up by 12.75 points, or 0.16%, to end at 8,192.25, after moving between 8,219.10 and 8,148.60. A firming trend in Asia and higher opening in Europe also supported the upmove, they said. PowerGrid led from the front, with a gain of 2.48%, with Axis Bank notching up 1.90%, Coal India 1.53%, Cipla 1.46%, GAIL 1.10% and ICICI Bank 1.07%.Bharti Airtel ended with most losses, down 2.36%, after it unveiled a free 4G data plan, followed by Hero MotoCorp 1.44% and Tata Motors 1.23%.Consumer durables gained the most by rising 3.01% followed by oil and gas (1.96%). PSU rose 1.58%, power 1.04% and infrastructure 0.75%. The broader markets were also in better shape, with the small-cap index surging 1.03% and mid-cap 0.61%.Foreign funds net sold shares worth Rs260.64 crore on Monday, as per provisional data.Meanwhile the rupee erased all its gains and closed one-month low after the dollar turned positive ahead of the release of key US manufacturing PMI data. This was the second consecutive session on which the rupee fell.The rupee closed at 68.33 per dollar — a level last seen on December 1, 2016, down 0.15% from its previous close of 68.23. The home currency opened at 68.08 against the dollar and touched a low of 68.37. Since April 1, 2016 till date, the rupee has fallen 3.05%.“The data will continue to show that the US economy is strengthening which will be positive for the US dollar,” said Satish Kumar analyst with Choice Broking firm.The last US Federal Reserve meeting signalled a faster pace of increases this year as the Donald Trump administration takes over with promises to boost the US economy through tax cuts, spending and deregulation. Traders are also cautious ahead of the release of the minutes of the Federal Open Market Committee meeting tomorrow. The minutes will be closely watched for signs of any potential change in the fiscal policy and any impact on the US monetary policy.Traders say that the political uncertainties following North Korea’s fresh nuclear testing also added fuel to the dollar demand.“Importer has likely bought the dollar to avert the risk”, said Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments.