After rising to record highs in the past two sessions, benchmark indices Sensex and Nifty opened in the red on Monday, tracking weak Asian markets, which fell amid protests in China over the Zero Covid policy. The rupee also fell 10 paise to $81.81 in opening trading amid a significant fall in the Chinese yuan following the protests there, which weighed on other Asian currencies. The rupee closed at 81.71 per US dollar on Friday.
In the opening trade, the Sensex fell 130 points to 62,161 and the Nifty 30 points to 18,480. Of the 30 stocks, Sensex, HDFC twins, Tata Steel, TCS, IndusInd Bank and Larsen & Toubro were the biggest laggards in opening trading; while Reliance, Maruti, Asian Paints, Bajaj Finserv and Wipro were the biggest outperformers.
Broader markets, however, opened in the green. The BSE MidCap and SmallCap indices gained up to 0.4 percent.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said: “There are two positives that could provide resilience to the ongoing rally in the market: first, the steady decline in crude oil has pushed Brent oil below $82. the steady FPI purchases (Rs 31,630 crore to date in November), particularly in fundamentally strong segments such as financials, IT, autos and capital goods.”
Vijayakumar added that despite these positives, markets are likely to be awaiting the US Fed chief’s speech on Wednesday. Any aggressive statements from Powel will be negative as markets have factored in slower rate hikes, pushing the closing rate to around 5 percent. The high term premium is an indication of the underlying bullishness in the market.
During Friday trading, the Sensex jumped 175.05 points or 0.28 percent to 62,447.73 – its lifetime intra-day high. Similarly, the broader NSE Nifty rose 28.65 points, or 0.15 percent, to finish at 18,512.75, its all-time high.
Meanwhile, the rupee fell 10 paise to 81.81 per dollar in opening trading on Monday. China’s protests against lockdowns and the country’s Zero Covid policy have caused Brent oil to fall $81.69 a barrel as the dollar index stands at 106.50 from a low of 106 on Friday.
Anil Kumar Bhansali, head (treasury) at Finrex Treasury Advisors, said: “In a data-heavy week where India would release its second quarter GDP figures, other countries would release their PMI data and the US would release the NFPR. release figures, the rupee should remain in a tight range of 81.20 to 81.90. Today’s open should be around 81.71 and between 81.50 and 81.90.”
He added that most Asian currencies have fallen against the dollar, with the strongest being the Chinese yuan, which fell to 7.24 from 7.16 on Friday, mainly due to protests against the political establishment there.
“Exporters should continue to sell near 81.90 levels during the day, while importers should buy dips like Friday,” he said.
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