Sensex, Nifty, Midcap gain strength; TCS, Tata Steel, GAIL rally

Moneycontrol Bureau10:57 am Market Update: Benchmark indices surged further with the Nifty reclaiming 8050 level.The Sensex was up 231.36 points at 26091.53 and the Nifty gained 86.85 points or 1.09 percent at 8052.35.About four shares advanced for every share falling on the BSE.10:42 am Rupee recovery: Indian rupee has seen sharp recovery in morning from its opening level of 68.74 against the US dollar.It has appreciated 35 paise to trade at 68.39 a dollar. In previous session, it hit a record low of 68.86 a dollar.FIIs buying or RBI intervention could be the reason for recovery.10:28 am FII outflow: Citi says in the week of 11/23/2016, bond funds continued to see a large outflow of USD 8.6 billion while equity funds had an inflow of USD 5.2 million.

US and Europe funds continued to see inflows of USD 5.9 billion and USD 140 billion, respectively. Global funds also saw an inflow of USD 2.4 billion.

USD 1.9 billion outflow from EM funds — EM funds had seen outflow for the fourth consecutive week. FIIs net sold USD 1.9 billion, where GEM funds lost USD 1.4 billion in outflow. Asia and Latin America funds had outflows of USD 456 million and USD 202 million, respectively. EMEA (Emerging Europe, Middle East, Africa) funds had USD 188 million of inflow.

Meanwhile, Asia particularly saw an outflow of USD 871 million during the week ended November 23. India continued to see USD 837 million of FII outflow. Taiwan and Thailand both had close to USD 200 million of foreign selling. However, Korea managed to attract USD 588 million of foreign buying after 3 weeks of outflows.10:15 am FII View: Issues on the domestic front like demonetisation, a weakening rupee are bigger than global issues for India at present, according to BNP Paribas.

India will eventually cope with the situation but the underperformance across many sectors could last for another couple of months, said Manishi Raychaudhuri, Asian Equity Strategist - Equity Cash Asia Pacific at BNP Paribas.   

GDP and corporate earnings could drag down for next two quarters, he said adding that a variety of factors including demonetisation have rendered useless the Sensex target of 29,000.

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Equity benchmarks gained strength amid volatility on the first day of December series, supported by technology, FMCG and banks stocks. The broader markets also extended gains with the BSE Midcap and Smallcap indices rising 0.8 percent and 1.2 percent, respectively.

The 30-share BSE Sensex was up 152.89 points at 26013.06 and the 50-share NSE Nifty rose 58.65 points to 8024.15. The market breadth was also strong as about four shares advanced for every share falling on the BSE.

Infosys, TCS, Asian Paints, Tata Steel, Adani Ports, Wipro, GAIL, Hero Motocorp and BHEL rallied 1-3 percent while Tata Motors lost 1.6 percent.