Despite a sharp sell-off in local stocks and lower dollar value ahead of key US economic data release, the Indian rupee showed strength, traders said, adding that strong capital inflows to equity and debt markets also provided support.

As per the norms put in place by Sebi to check any misuse, only those foreign entities, whose country have signed bilateral MoUs with its counterpart, are eligible for issuance of such instruments.

Foreign investors are pumping in record money in India's debt markets. Let's see what this means for your investments.

Besides, positive global cues after China announced a rate cut and speculation of European Central Bank stepping up stimulus measures also boosted trading sentiments, equity brokers said.

Gains in the key stock market indices were powered by Cipla that climbed 3.23 per cent after the drugmaker announced a pact with Serum Institute of India.

Sustained capital inflows helped the domestic currency to recover some lost ground but a stronger dollar overseas capped the rise in the rupee, a forex dealer said.

Brokers said, robust buying by overseas investors and tumbling crude oil prices also supported the strong momentum in stocks.

Expectations of encouraging economic data like inflation for October, IIP data for September, to be released after market hours on Wednesday, buoyed trading sentiments.

There was a renewed dollar demand from importers, mainly oil refiners, in view of fall in crude oil prices, hitting the rupee value against dollar, a forex dealer said.

Market players said sentiment was upbeat on hopes that the govt will increase economic reforms process after Cabinet expansion, lifting the Sensex and Nifty to new highs.

A weak dollar in the overseas market also boosted the rupee value against the greenback, a forex dealer said.

Among Sensex components, 21 stocks including BHEL, GAIL, Coal India, Hero MotoCorp, Tata Steel and Hindalco fell.

The renewed strength of dollar is keeping emerging market currencies under immense pressure, a forex dealer commented.

Besides, continued inflows on solid corporate earnings also helped markets boost investor wealth by nearly Rs 1.5 lakh crore in a single session.

With markets ending positively on last day of the Hindu Samvat year 2070, the Sensex has risen by over 26 per cent during this period.

Besides, revival of buying by foreign funds after remaining sellers for several sessions, supported the upside in stock prices, brokers said.

\"The appreciation in rupee was helped by local equities that closed up by almost half a per cent for the day\", said Pramit Brahmbhatt, Veracity Group, CEO.

Selling in realty, consumer durables, IT, oil & gas, auto, teck, FMCG and capital goods, dragged down the Sensex into negative zone despite positive inflation data.

In comparison, the debt market saw huge inflow of over Rs 6,300 crore during the period.

Intra-day the rupee moved in a range of 61.11 and 61.36 per dollar, before concluding the day at 61.35 per dollar.