The benchmark Sensex, for the second time in the history, breached the 25,000 mark on Monday but could not sustain the gains as foreign institutional investors (FII) booked profits from the Indian markets. Sensex surged by 482 points and touched a new life-time high of 25,175.22 during the session but later plummeted by over 740 points amid heavy profit booking.
Sensex started the session strong and surged to record highs boosted by heavy buying in power, public sector, capital goods, automobile and real estate stocks. However, the momentum fizzled out in last hour and the Sensex briefly slipped into negative zone to touch a low of 24,433.90. It recovered marginally to end 23.53 points higher at 24,716.88, surpassing its record close of 24,693.35 which it reported on May 23.
In three straight sessions, Sensex has risen 418 points. On May 16, Sensex had hit life-time high of 25,375.63 but did not close above the key 25,000 mark. Meanwhile, the broad-based Nifty, which had rallied over 136 points during the session to a high of 7,504, succumbed to profit-booking and eased by 8.05 points, to end at 7,359.05.
Commenting on the sudden movement of the markets, Kunal Saraogi from Equity Rush said, “The profit booking came from FIIs who have been invested in the markets since the last 3 to 4 years. Markets later rebounded from its day low on back of fresh buying towards the end of the session.”
Experts also said that going ahead focus will be on the Reserve Bank of India’s monetary policy in first week of June and Union Budget from Modi Government.
On the other hand, rupee on Monday weakened by 19 paise, logging its sharpest drop in over a month, to close at Rs 58.71 per dollar. As per forex experts, domestic currency depreciated due to the heavy demand for dollar from oil importers and late profit-booking in equities.
Domestic currency started the session higher at Rs 58.45 per dollar and immediately touched a high of Rs 58.41 per dollar. later, it met with strong resistance and fell back sharply to a low of Rs 58.93 per dollar. Monday’s drop was the biggest since the 31-paise fall on April 23.
Month-end dollar demand from importers, mainly oil refiners, weighed on the rupee value, forex experts say. The dollar index was down 0.07 per cent against a basket of six major global currencies.
“Rupee was seen approaching the levels of Rs 59.00 per dollar today amid weak stock markets which were seen erasing the earlier robust gains posted during the session. Technically, a sustained closing above Rs 58.80 per dollar will signal a bullish trend,” said Abhishek Goenka, Founder & CEO, India Forex Advisors.
Meanwhile, FIIs remained net sellers in the stock markets on Monday despite fresh buying seen towards the end of the session. As per the provisional data provided by the stock exchanges, FIIs sold shares worth Rs 84.13 crore on Monday. Market breadth also turned negative as 1,660 stocks ended lower while 1,362 stocks finished higher. But the total turnover rose to Rs 6,121.45 crore from Rs 5,449.88 crore on last Friday.