Relief rally: Sensex jumps 875 pts despite FPI selling – Times of India

MUMBAI: Across-the-board buying on the back of strong recovery in global markets lifted the sensex by over 1% on Wednesday with 25 of the 30 index constituents closing higher. The day’s recovery came despite strong selling by foreign funds as domestic funds were large buyers.
Backed by a strong recovery in the US market on Tuesday night and in major Asia markets on Wednesday morning, the sensex picked up gains in early trades with the day’s high at 79,639 points, up more than 1,000 points.After some profit-taking at higher levels, the index closed 875 points up at 79,468 points. On the NSE, Nifty closed 305 points up at 24,298.
The Indian markets saw a relief rally on Wednesday but going ahead volatility can’t be ruled out, said Siddhartha Khemka of Motilal Oswal Financial Services.
In Wednesday’s session, outside of the large cap stocks, even midcap and small caps picked up smart gains.
Rupee drops to new low, nears 84/$
The rupee closed at a new low of 83.96 against the dollar on Wednesday after dipping to a new low of 83.97 in intraday trade. The domestic unit had closed at 83.95 on Tuesday following large-scale selling by foreign institutional investors. Markets worldwide have recovered after a massive selloff on Monday due to weak jobs data from the US coupled with the unwinding of the yen carry trade.
The yen carry trade involves borrowing Japanese yen at low interest rates to invest in higher-yielding assets in other currencies, aiming to profit from the interest rate difference. This arbitrage opportunity ended after the Bank of Japan raised interest rates on July to support the yen and reduce import costs.