Ease in Ukraine tension turned out to be a boon for Indian stock markets and the benchmark Sensex posted its biggest intraday gain in the last seven weeks. Sensex surged by 263.08 points backed by buying from foreign institutional investors (FII) and retail investors. Nifty also surged by 76.50 points and ended the session at 6,297.95. Rupee also gained by 19 paise and ended the session at Rs 61.85 per dollar.
As per market experts, equity markets bounced back as global sentiment towards emerging market assets again improved after reports of easing tension between Russia and Ukraine. FII buying and appreciation in domestic currency also supported the rally of shares. Tracking local stocks, rupee also regained backed by continued dollar inflow from foreign funds in stock markets. Also selling of the American currency aided the sentiment, said forex traders.
Rupee started the session lower at Rs 62.12 per dollar from previous close of Rs 62.04 per dollar and touched a low of Rs 62.15 per dollar on initial hesitancy in local shares. Currency later bounced back to a high of Rs 61.82 per dollar before closing after rising 19 paise at Rs 61.85 per dollar.
"The rupee ended on a positive note amid easing geopolitical concerns globally. The Russia-Ukraine conflict has been threatening the global sentiments and boosting the demand for safe haven since last couple of sessions. However these concerns are getting eased as Russia's President ordered troops in military drills in central and western Russia to return to base," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
Meanwhile in the stock markets, FIIs continued buying stocks. As per the provisional data provided by the stock exchanges, FIIs invest Rs 185.61 crore in equity markets on Tuesday. In the last two sessions, FIIs have bought shares worth Rs 384.14 crore.