Foreign institutional investors (FIIs) continued selling on Wednesday, September 6, as US bond yields and US dollar grew resilient after a sudden spike in crude oil prices. The domestic institutional investors (DIIs) also offloaded in Indian stocks today even as domestic benchmark equity indices Sensex and Nifty settled higher for the fourth consecutive session on the back of positive domestic macroeconomic data.
As per the NSE data, FIIs cumulatively bought ₹9,994.21 crore of Indian equities, while they sold ₹13,240.07 crore — resulting in an outflow of ₹3,245.86 crore. Meanwhile, DIIs infused ₹10,202.87 crore and offloaded ₹10,450.33 crore, registering an outflow of ₹247.46 crore.
Oil prices are holding steady today so far, after rising over 1 per cent to a 10-month high level in the previous session as Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.
In the previous session, Brent crude futures rose by $1.04, or 1.2 per cent, to settle at $90.04 a barrel, closing above the $90 mark for the first time since November 16, 2022. US WTI futures had gained $1.14, or 1.3 per cent, to settle at $86.69 a barrel, also a 10-month high.
‘’The negative factors are the surprising strength of the dollar index at 104.86, the resilient bond yields in the US (the 10-year at 4.26), and now, the Brent crude at $90. The spike in crude is a major macro concern,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
‘’In this scenario, the FIIs are likely to continue selling in the cash market. On the positive side, the sustained DII buying is imparting strength to the market. DIIs have bought stocks worth ₹5934 crores in the cash market during the last three trading days of September,” added Dr. V K Vijayakumar.
On Wednesday, domestic equity benchmarks Sensex and Nifty settled higher for the fourth consecutive session supported by gains in shares of select heavyweights, including HDFC Bank and Bharti Airtel.
Sensex closed 100 points, or 0.15 per cent, higher at 65,880.52 while the Nifty50 closed the day at 19,611.05, up 36 points, or 0.18 per cent. BSE Midcap index ended with a gain of 0.13 per cent at 32,122.06 after hitting its fresh record high of 32,182.66 during the session. The BSE Smallcap index ended in the red, snapping the winning streak of the last seven consecutive sessions.
The domestic market is taking comfort from India’s robust growth outlook and expectations of easing inflation in the coming months. However, rising crude oil prices and poor monsoon pose a risk to markets.
The Indian rupee depreciated 14 paise to hit a 10-month low level against the US dollar on Wednesday tracking losses in Asian peers and a sharp surge in crude oil prices. The Indian currency fell to 83.18 to the US dollar as against its previous close of 83.04.
Where are markets headed?
After the flat start, Nifty inched gradually lower in the first half however a strong rebound in the select heavyweights pared all the loss. Eventually, it settled around the day’s high at 19,611.05 levels.
The tone was mixed on the sectoral front wherein FMCG and pharma rebounded swiftly while realty and metal ended lower. The broader indices witnessed a breather after the recent surge and closed almost flat, according to analysts.
‘’Though we are seeing a rebound in the index, it lacks decisiveness due to the prevailing underperformance of the banking pack, which holds considerable weight. Mixed cues from the global front are also weighing on the sentiment. We thus reiterate our view to stay focused on stock selection and avoid going overboard,” said Ajit Mishra, SVP – Technical Research, Religare Broking.
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Updated: 06 Sep 2023, 07:38 PM IST