Sensex ends higher; rupee strengthens

The post-budget climb went on for the third day as the Sensex managed to close at 28,241 points with a minuscule gain after a monthly survey suggested that Reserve Bank has much headroom to stay accommodative in its policy meet next week.Aided by banking and healthcare stocks, the 30-share Sensex moved sideways for much of the session before settling at 28,240.52, up 13.91 points, or 0.05%. The previous two sessions have seen a rally of 570.65 points after the Union Budget was greeted positively by investors. The 50-share NSE Nifty settled at 8,740.95, up 6.70 points, or 0.08%.On a weekly basis, the Sensex rallied 358.06 points, or 1.28%, and the Nifty 99.70 points, or 1.15%. Services sector contracted for the third consecutive month in January as the Nikkei India Services PMI stood at 48.7, as against 46.8 in December 2016. The PMI survey showed that input cost inflation slowed since December whereas average selling prices shrank again, which may prompt the Reserve Bank to go in for an “accommodative” monetary policy. Rupee was a sentiment booster too as its good run against the dollar continued at 67.30 (intra-day).Shares of banks such as SBI, Axis Bank and HDFC Bank were at the centre of brisk buying activity, which rose by up to 1.72% ahead of the RBI policy meet on February 8.Cipla, Coal India, Dr Reddy’s, TCS, Sun Pharma, HUL, GAIL and Lupin advanced by up to 4.18%. Sun TV Network soared 23.92% after a special court yesterday acquitted former telecom minister Dayanidhi Maran, his brother and promoter Kalanithi Maran and others in the Aircel-Maxis deal case.Glenmark Pharma jumped 4.21% after an over two-fold jump in consolidated net profit for the December quarter. In the meantime, shares of BSE made a stellar debut at the National Stock Exchange (NSE) yesterday by surging 32.65% to Rs1,069.20 against the issue price of Rs806. The healthcare scaled the most (1.61%), followed by PSU, realty, capital goods, IT and bank.The broader markets too continued to trend firm as retail investors boosted their bets, with the BSE small-cap index rising 1.08% and mid-cap 0.61.“The market is consolidating after the strong rally on the budget day,” said Vinod Nair, head of research at Geojit BNP Paribas Securities. “Going forward, the focus will be on the RBI meet next week,” he added.Meanwhile the rupee closed at a twelve-week high against the US dollar as foreign inflows returned to India in the wake of better earnings and the return of risk appetite.The home currency closed at 67.32 — a level last seen on November 11, 2016, up 0.1% from its previous close of 67.38. The local currency opened at 67.34 a dollar and touched a low of 67.29 — a level last seen on November 11, 2016.FII’s bought nearly $635.60mn in equity over the last twelve trading sessions and have been buyers on all but one trading sessions over this period.India’s 10-year bond yield closed at 6.409% from its Thursday’s close of 6.401%. Bond yields and prices move in opposite directions.Since the beginning of this year, the rupee has gained 0.91%, while foreign institutional investors have bought $111.40mn from local equity and sold $247.20mn in debt markets.Asian currencies were trading lower. Japanese yen was down 0.31%, Philippines peso 0.24%, Singapore dollar 0.22%, China offshore 0.17%, Malaysian ringgit 0.11%, South Korean won 0.07%, Thai baht 0.05%. However, Taiwan dollar 0.34%, China renminbi 0.19%, Indonesian rupiah 0.06%.The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.07, up 0.28% from its previous close of 99.79.