The rally in Indian stock indices extended for seven straight sessions on Friday largely on account of the return of foreign portfolio investors to India after multiple months as well as inflation seemingly plateauing.
At 9.47 a.m., Sensex traded at 58,618.34 points, up 267.81 points or 0.46 per cent, whereas Nifty traded at 17,476.55 points, up 88.40 points or 0.51 per cent. Among the Nifty 50 stocks, 39 rose this morning and the rest traded in the red, National Stock Exchange data showed.
“In India, the FPIs turning buyers has changed the sentiments in favour of the bulls. The market momentum is so strong that it is overpowering negatives like higher valuations and rising trade deficit. If FPI buying sustains, the market may continue to remain resilient, but investors should exercise some caution,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Foreign portfolio investors becoming net buyers in Indian stock markets again after nine long months renewed the investors’ sentiment.
In July, FPIs bought equities worth Rs 4,989 crore and became net buyers after nine months, National Securities Depository (NSDL) data showed.
Tightening of monetary policy in advanced economies including rising demand for dollar-denominated commodities, and strength in the US dollar had triggered a consistent outflow of funds from Indian markets. Investors typically prefer stable markets in times of high market uncertainty.
Notably, the Indian stocks recorded their best weekly performance during the week to July 22 marking its best week since February 2021, supported by renewed buying, especially in banking and IT stocks, among others.
During the past two weeks, Sensex and Nifty rose over 7 per cent on a cumulative basis. This week, the indices have cumulatively risen 3-4 per cent so far.
(inputs from ANI)