Foreign institutional investors (FIIs) continued selling on Wednesday, October 11, however the intensity of selling has declined on easing US bond yields and softer crude oil prices. This comes even as domestic equity benchmarks Sensex and Nifty settled higher on positive global cues ahead of US Federal Reserve minutes-of-the-meeting. The domestic institutional investors (DIIs) are net buyers again and invested ₹1,032 crore in Indian stocks today.
As per the NSE data, FIIs cumulatively bought ₹12,526.94 crore of Indian equities, while they sold ₹12,948.71 crore — resulting in an outflow of ₹421.77 crore on Wednesday. Meanwhile, DIIs infused ₹8,369.48 crore and offloaded ₹7,337.46 crore, registering an inflow of ₹1,032.02 crore.
‘’The fact that Nifty is just 2.5 per cent away from the all-time high indicates the strength and resilience of the market. Even though FIIs are sustained sellers in the market, buying by DIIs, HNIs and retail are counterbalancing the selling and supporting the market. Safety is in large-caps,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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Stock Market Today
On Wednesday, October 11, domestic equity benchmarks Sensex and Nifty 50 extended their gains into the second consecutive session on the back of positive global cues as bond yields eased ahead of the US Federal Reserve’s latest meeting minutes and US inflation prints.
US bond yields have cooled off from their highest levels since 2007 after signals from the Fed officials that rate hikes could be over. The minutes from the Fed’s September meeting are due to be released today.
On the macro front, India’s September CPI-based inflation, or retail inflation, is also expected on Thursday. Experts expect the inflation print to come near 5.5 per cent in September against 7.44 per cent in July and 6.83 per cent in August.
Nifty 50 closed at 19,811.35, up 122 points, or 0.62 per cent and the 30-share pack Sensex settled at 66,473.05, up 394 points, or 0.60 per cent on Wednesday, ahead of the July-September quarter results announcement of India’s leading software services exporter Tata Consultancy Services (TCS).
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“The total market breadth was strong, as investors believe that the Middle East skirmish will be contained within the region and should not impact the crude price. Amid dovish comments from the US federal reserve, the US 10-year bond yield traded lower. Q2 earning season will kick-start with the IT sector, which has a moderate expectation, however the broad corporates are expected to provide a bumper result,” said Vinod Nair, Head of Research at Geojit Financial Services.
Where are markets headed?
Analysts noted that the fundamental support to the market comes from the resilience of the US economy, the declining US bond yields and the hope that the Israel-Hamas conflict will remain a localised crisis which will not impact crude prices. ‘’However, investors should remain cautious since the situation taking a turn for the worse cannot be ruled out,” said Dr. V K Vijayakumar.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities also agreed. “Positive global cues helped domestic markets extend gains for a second straight session as moderating US bond yields improved the sentiment,” said Chouhan.
‘’With oil prices seeing little movement in the wake of the Israel-Palestine conflict, the focus has once again quickly shifted back to global macro-economy. If the US treasury yields doesn’t spike from here on, it would bring some stability to global equity markets and encourage investors to undertake risk-on strategy,” added Chouhan.
Ajit Mishra, SVP – Technical Research, Religare Broking said that the recent stability on the global front has prompted this rebound and indications are in the favor of the prevailing tone to continue. ‘’Traders should look for buying opportunities on dips but maintain focus on risk management, citing a rise in volatility due to the earnings announcements,” said Mishra.
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Updated: 11 Oct 2023, 09:49 PM IST