Mumbai: India's equity indices rose on Monday, tracking the gains in the rest of Asia, as the rebound in the rupee and renewed foreign flows last week revived sentiment.
NSE's Nifty rose 206 points, or 0.8%, to close at 26,172. BSE's Sensex rose 638 points, or 0.75%, to end at 85,567. Elsewhere in Asia, Japan gained 1.8% as the yen dropped to near lows even after the country's central bank on Friday raised the policy rate by a quarter point to a three-decade peak of 0.75%. China advanced 0.7%, Hong Kong rose 0.4%, South Korea gained 2.1% and Taiwan rose 1.6%. The pan-Europe index Stoxx 600 was down 0.15%.
At home, the broader market also showed strength with analysts terming the upmove as a 'Santa rally'- the tendency of the market to move around Christmas and early New Year.
"The final weeks of the calendar year are typically associated with a Santa Rally, where midcap and smallcap stocks tend to outperform," said Rajesh Bhosale, Equity Technical Analyst, Angel One. "This trend has already begun to play out over the last two sessions."
The Nifty Midcap 150 gained 0.8% and the Nifty Small-cap 250 rose 1%. Out of the total 4,501 stocks traded on the BSE, 2,768 advanced and 1,551 declined at close.
FPIs net sold shares worth ₹457 crore, while domestic institutions were buyers worth ₹4,058 crore.
In the past three trading sessions, overseas investors bought worth Rs 4,000 crore after selling worth Rs 19,500 crore till December 16. The rupee is now trading below the Rs 90 levels, having recovered over the past two sessions.
Dharmesh Shah, head of Technicals at ICICI Securities is positive on the market. “The Nifty has found support near its 50 Day EMA(exponential moving average) around the 25,700 level multiple times, reflecting underlying strength in the index,” he said, IT stocks led the gains on Monday with the Nifty IT index advancing more than 2%.
“Strengthening rupee against the dollar is a major cause for the rally in terms of sentiment,” said Gaurav Sharma, head of research at Globe Capital Market.“A good round of buying was witnessed among IT majors like Infosys, TCS, HCL Tech, Tech Mahindra, and Wipro.” Shah expects the Nifty to move towards the 26,700 zone by January. Strong support is seen at 25,700, and a ‘buy on dips’ strategy is advisable, he said.