Markets rise over 1%, FIIs sell most in January since covid-19 outbreak
PremiumThe Economic Survey for 2021-22 expects gross domestic product to grow by 9.2% this year and 8% to 8.5% in FY23
The Economic Survey of financial year 2022 tabled in the Lok Sabha on Monday boosted investor confidence, driving equities higher. The BSE Sensex gained 813.94 points or 1.42%, ending at 58,014.17, while the 50-share index Nifty surged 237.90 points or 1.39% at 17,339.85.
Markets in other Asia-Pacific regions were mostly higher, while those in China and South Korea were closed for the Lunar New Year holidays. The Nikkei in Japan and Hong Kong’s Hang Seng index rose 1%.
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The market took positive cues from global markets and favourable takeaways from the Economic Survey and rallied ahead of budget day, with all major sectors in the green, according to Vinod Nair, head of research, Geojit Financial Services. “The major macro indicators of the survey gave confidence that the country is well placed to face future challenges with gross domestic product growth for FY23 projected at 8-8.5%. Global markets turned positive backed by gains in the US market, as inve-stors ignored geopolitical disturbances and turned their eye towards strong earnings numbers from tech firms," he said.
The Economic Survey for 2021-22 expects GDP to grow by 9.2% this year and 8% to 8.5% in FY23, expressing concerns about the implications of inflation and energy prices. The survey also mentioned risks such as covid, inflation, and the cycle of liquidity withdrawal being initiated by major central banks. Economic growth for FY23 appears to have built in a cushion for any disruption caused by future covid waves, even as preparedness of economic age-nts has improved amid the insurance offered by the bouquet of social safety nets, said Aditi Nayar, chief economist, ICRA Ltd.
As all eyes are now on the Union budget to be tabled on Tuesday.
Key budget announcements on infra, capex, divestment, and government policies to spur demand and create jobs in the economy will be watched for by market investors on Tuesday.
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However, Indian markets have missed the pre-budget rally. The markets fell nearly 2% in the month to the Union budget, compared with a rise of 2% in a month to the budget last year.
The fall in Indian markets is mostly led by a heavy sell-off by foreign institutional investors (FIIs) because of the winding up of policy stimulus by the Fed. In January alone, FIIs have dumped Indian shares worth $3.79 billion, the highest since March 2020 when they were net sellers of $8.38 billion in a single month. In the last four months, FIIs have drained $8.63 billion worth of Indian equities. In contrast, domestic institutional investors (DIIs) have shown resilience. DIIs have pumped in ₹18,279.75 crore in shares in this year so far.
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