MUMBAI: Foreign fund buying helped the Sensex settle marginally higher on Monday, despite crude oil prices continuing their recent uptrend and the rupee hitting a new record low against the dollar. Some short covering during the closing hours of the day's session also contributed to the upward movement on Dalal Street, according to market players.
Market Opens Lower Amid Geopolitical Tensions
With fresh tensions brewing between the US and Iran, Brent crude rallied above the $111 per barrel level. This development raised the chances of higher inflation and higher interest rates in India, as crude is the country's biggest import item. Compounding the situation, the rupee weakened to near the 96.5 per dollar level in early trades.
Intraday Recovery and Closing
Weighed down by these factors, the Sensex opened the week's trading about 400 points down and slid in early trades to lose more than 1,000 points from Friday's close. However, a smart recovery started soon after. At the close, the index stood at 75,315 points, up 77 points from the previous session.
Foreign and Domestic Fund Inflows
Foreign funds were aggressive buyers on Monday, with a net inflow of Rs 2,814 crore, according to BSE data. Domestic funds were also buyers during the day, with net inflows of Rs 2,682 crore. However, buying was mostly concentrated in large-cap stocks, while mid-cap and small-cap stocks witnessed selling. As a result, the BSE mid-cap index closed 0.2% lower, while the small-cap index ended 1.5% down.
Impact on Investor Wealth
The day's session left investors poorer by a little over Rs 2 lakh crore, with BSE's market capitalisation now at about Rs 458.4 lakh crore. The recovery in the Sensex was notable given the headwinds from rising crude oil prices and a weakening rupee, which typically weigh on market sentiment.
