Sensex crosses 52,000-mark; Rupee Surges Highest Since March 3, 2020

The 30-share BSE Sensex on Monday, February 15, crossed the 52,000 level for the first time ever in the early trading session. The index reported a gap-up opening of nearly 300 points from the previous close.

The BSE index ended the session at 52,154.13, up 609.83 points, or 1.18%. The Banking and Realty stocks lifted the index to reach fresh highs. Axis Bank, ICICI Bank and SBI ended up over 6%, 4% and 3% respectively.

The FPI inflows in the month of February have turned positive again with buying of more than Rs 19,000 crore in the cash segment of the market post-budget and have pushed the benchmark indices to record fresh highs.

Sensex has added nearly 6000 points so far after having recorded a low of 46,160 on January 29. The index tanked drastically ahead of budget cautiousness but has managed to add 6000 points and record a new high of 52,000 on February 15.

Vivek Bajaj, Co-founder, Stockedge, in a conversation with Business World, mentioned that the rally in the index is likely to be sustained because earlier it was backed by selective sectors but post-budget the recovery expectations have led all sectors to contribute in the rally. Infrastructure has bounced back post-budget and has cleared all bad phases it witnessed in the pandemic. FPI's inflows are driven by the recovery that India has shown, and it has also been a benchmark in the global market.

Rupee Impact

The rupee also witnessed trading at a nearly one-year high. It was trading at Rs 72.50/USD. Strong buying in the domestic markets and hopes of an additional US stimulus package for economic recovery have maintained the sentiment. 

Explaining the reasoning behind the rally witnessed in rupee, Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services attributed it to the 'optimism' across the globe where regions are rolling out vaccines and also easing lockdown restrictions. 

“This optimism has pushed the Indian rupee to surge to Rs 72.57, the highest level since Mar 3, 2020. The trading range has shifted to 72.00-73 and RBI seem to be comfortable with the rupee appreciating below Rs 73 level. This week is a holiday-thinned market so the Foreign Exchange (fx) trading may be uninspiring, but RBI intervention will be eyed. The focus will remain on global flash PMIs and Fed minutes and until then 72.50 will act as strong support in the USDINR spot, a break of which can push the spot price towards 72 zone, while Rs 73 will act as immediate resistance,” Gupta added. 

Nish Bhatt, Founder & CEO, Millwood Kane International, said, "The appreciation in the rupee is primarily due to RBI intervention, positive comments by rating agency Moody's on India's economic outlook, record fund flows in Indian equities by FIIs.

The rally in crude prices, a hope of an extra stimulus package from the US government, and the policy stance of the US Fed to keep rates low for a longer duration of time has kept the Dollar lower. Moving forward RBI's action via OMO to support the rupee, global economic recovery, and vaccination process will guide the INR/USD movement."