Markets snap 4-day losing streak; Nifty above 5,400

Markets closed on a high with the benchmark indices gaining over 2% each as Rupee recovered from an all time low. Also, the gains in European markets coupled with upbeat reading on Chinese manufacturing data aided the positive sentiment.

At close, the Sensex was up 407 points or 2.3% at 18,313 and the Nifty advanced 106 points or 2%, to close above the psychological levels of 5,400 at 5,408.

In the broader markets, the mid and smallcap indices gained 0.6-0.7%, underperforming the BSE benchmark index, which surged over 2%.

Earlier in the day, the markets had opened on a negative note with benchmark index Sensex inching tad below the psychological level of 18,000 after rupee fell to a yet another life-low of 65 against US dollar.

However, post the strong opening in European markets and the better than expected Chinese manufacturing data which hit a four-month high in August helped the metal counters to rally which lead the indices higher. Also, the Rupee recovered sharply in noon deals.

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Asian Markets

Asian markets were pressure  as a spike in U.S. bond yields drove up borrowing costs globally, and even surprisingly strong data from China couldn't completely staunch the bleeding.

Emerging markets again bore the brunt of the selling as many have come to rely on cheap dollars to underpin domestic demand and fund current account deficits. The currencies of Indonesia, Malaysia and Thailand all hit multi-year lows, while the Indian rupee ploughed another historic trough.

Their stock markets likewise all fell between 1 and 2%, while the MSCI index of Asia-Pacific shares outside Japan shed 1.1% to a six-week low.

Japan's Nikkei fared somewhat better with a loss of only 0.4%, while Shanghai .SSEC was unscathed thanks to an upbeat reading on Chinese manufacturing.

European markets, however, opened higher. France's CAC rose 0.5% to 4,035, Germany’s DAX gained 0.4% to 8,321 while UK’s FTSE was up 0.5% to 6,421

Rupee

Despite recent measures from the central bank and the government to defend it, the rupee on Thursday opened lower against the dollar.

The rupee fell past 65 to the dollar to a record low, after Federal Reserve minutes hinted that the U.S. was on course to begin tapering stimulus as early as next month and as foreign investors become sellers of Indian stocks.

However, later in the day, Rupee gained and was quoting at 64.86 at 1600 hours.

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Sectors & Stocks

Among the sectoral indices, only Realty index closed in the negative, down 0.7%.

Metal index up 8%was the top gainer as metal companies posted its biggest single day rally in past two years on hopes revival of Chinese economy.

Tata Steel, Hindalco Industries, Jindal Steel and Power, Sterlite Industries, NMDC, Sesa Goa, JSW Steel and SAIL are up in between 5-13% on the BSE.

Oil & Gas, PSU, Health Care, IT, Teck, Auto, Capital Goods, Power and FMCG gained 1.7-3.6%.

Banking index closed marginally higher, up 0.2%, as many private sector names were under pressure after the rupee crossed 65 mark against US dollar.

YES Bank, Federal Bank, HDFC Bank, HDFC and Axis Bank were down in the range of 0.3-5%.

Apart from the metal names, the major gainers among the Sensex-30 for the day were ONGC, Bharti Airtel, Sun Pharma, TCS, Dr Reddys Lab, Tata Motors and Reliance Industries which added 3-7%.

Coal India, BHEL, ITC, CIpla, Infosys, L&T and Bajaj Auto up 2-3% were the other notable gainers.

The market breadth was positive. 1,280 stocks advanced while 985 stocks declined on the BSE.