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Sensex, Nifty close higher as banks, financial services rally

Dubai - The Sensex rose as much as 520 points and Nifty briefly moved above its important psychological level of 11,400.

The key Indian equity indices traded in the green on Tuesday as Sensex closed up 477.54 points or 1.26 per cent at 38,528.332 and Nifty50 on the National Stock Exchange closed up 138.25 points or 1.23 per cent at at 11,385.35.
The Sensex rose as much as 520 points and Nifty briefly moved above its important psychological level of 11,400. HDFC Bank, Reliance Industries, ICICI Bank, Kotak Mahindra Bank and Infosys were among the top movers in the Sensex. They collectively contributed nearly 300 points towards the Sensex. 
The Sensex had opened at 38,084.70 and witnessed healthy buying in consumer durables, IT and auto stocks. Manish Hathiramani, technical analyst with Deen Dayal Investments said: "The Nifty is trading above the crucial 11,350 resistance level. We need to keep a watch to see if it can close above this level. If we manage to do that, we could target a 200 point move (upwards) on the Nifty."
Arun Leslie John, chief market analyst, Century Financial, said: "In Nifty50 gain is led by Grasim which is up by 5 per cent, ONGC is up by 2 per cent and Reliance is up by 1.68 per cent. Among the sectoral indices auto was up by 0.72 per cent, IT and metal was up by 0.55 per cent and banks was up by 0.50 per cent. Market will remain volatile amid US-China tension and development on US Stimulus package."
Meanwhile, the Indian rupee settled 12 paise higher at 74.76 (provisional) against the US dollar to quote at Dh20.37 on Tuesday as heavy buying in domestic equities and weak American currency strengthened investor sentiments.
At the interbank forex market, the domestic unit traded in a narrow range. It opened at 74.78 and ended the day at 74.76, registering a gain of 12 paise over its previous close of 74.88 against the greenback.
During the session, the local unit witnessed an intra-day high of 74.73 and a low of 74.89 against the US dollar.
Forex traders said positive trend in the equity markets, weak American currency and sustained foreign fund inflows supported the rupee, while concerns over rising Covid-19 cases weighed on investor sentiment.The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.28 percent to 92.59.
"INR is depreciated by 0.05 per cent to 74.7825 after appreciating by 0.175 to 74.7430 in previous session against US Dollar amid positive domestic market mood and weakness in dollar against major currencies," said John.
Abhishek Goenka, Founder and CEO, IFA Global, said: "The US dollar has weakened overnight, especially against majors. US nominal yields have come off 1-2bps across the curve. Negative real rates are weighing on the US dollar. The cross currency basis is flat for tenors upto one year. There is absolutely no term premium. This indicates that there is a lot of demand, especially among US corporates to borrow in US dollar and swap it into other currencies especially the euro." - With inputs from Ians, PTI, sandhya@khaleejtimes.com