Sensex regains 60k mark helped by FII flows
Premium- The global cues also remained favorable as the dollar index slided leading Rupee to strengthen too
Sensex once again regained the sixty thousand mark on Monday, supported by strong FII flows and encouraged by softer crude prices. With gains of 0.54%, Sense closed at 60,115.13, on Monday.
The global cues also remained favorable as the dollar index slided leading Rupee to strengthen too.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, “Firm global market cues triggered an upsurge in local benchmark indices as Sensex closed above the crucial 60,000 mark on buying in IT and realty stocks." In recent sessions, falling global crude oil prices and sliding US Dollar index have encouraged domestic investors to increase their equity exposure, added Chouhan.
The market confidence also has stemmed from strength in the Indian economy. Domestic economy is witnessing strong vigour and the same is assisting a steady growth in Indian equities, said analysts.
"A 15.5% YoY increase in bank credits during August suggests that the economy is recovering rapidly, said Vinod Nair, Head of Research at Geojit Financial Services.
On dollar rupee
The dollar rupee spot closed 6 paise lower at 79.52, helped by the declining US Dollar Index, continued FPIs (Foreign portfolio investors) buying and softer crude.
Brent trading around $93.46 a barrel is now at much lower than the levels of more than $120 a barrel seen in June. FPI also were net buyers of equities worth ₹2049.65 Crore on Monday, suggested the provisional data on the NSE. The FPI already have been net buyers worth ₹64322.25 crore worth of equities in second half till 9th of September, after being net sellers during first half
However, experts also remain slightly cautious.
MINT PREMIUM See All
Pankaj Pandey, Head – Research, ICICIdirect said that market participants should be wary of the rising inflation and resulting removal of liquidity from the system. Rising inflation risk and hence withdrawal of ultra-easy monetary policy by global central banks (mainly Federal Reserve) may trigger a sharp rise in bond yields which can cause risk assets to correct sharply, added Pandey.
The India inflation numbers in August which at 7.0% came higher from 6.7% in the previous month.
The worse -than-expected CPI and IIP prints could exert a knee-jerk reaction on Nifty, which closed above the 17900 for the first time in four months on Monday, market analysts feel.
“Markets could react adversely to the disappointing data on both counts," said Sudip Bandyopadhyay, group chairman, Inditrade Capital. “However, with so much money sloshing at the sidelines, the recovery also would be swift. In fact, going by the trend, I wouldn’t be surprised if we correct initially and witness a recovery tomorrow (Tuesday) itself."
Bandyopadhyay said that many Emerging Market funds were looking to cut exposure to China and that some of these monies were finding their way to Indian stocks, among others. India is also a relative outperformer, expected to record growth of 6-7% this fiscal amid lingering fears of a recession in the US and Europe as elevated inflation makes central banks like Fed and ECB more hawkish.
Speaking before the IIP and CPI data release, Geojit’s Nair, had said, . Due to rising food prices, domestic inflation figures are predicted to show a gradual rise from 6.7% in July which could add volatility in the short-term."
Raising the red flag on elevated inflation, Madan Sabnavis, chief economist, Bank of Baroda, said, “This high inflation will work in favour of more aggression from the RBI in terms of hiking the repo rate. The base effect will tend to keep inflation elevated for the next three months for sure with added pressure from food products in case of a deficit in production."
BoB had forecast August retail prices to grow at 6.7% , against which it hit 7%, and July IIP at 5.4% against the actual 2.4%.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less