Foreign institutional investors (FIIs) continued selling on Tuesday, October 10, even as domestic equity benchmarks Sensex and Nifty settled higher by shrugging off concerns over the Israel-Hamas conflict. The domestic institutional investors (DIIs) are net buyers again and invested ₹783.25 crore in Indian stocks today.
As per the NSE data, FIIs cumulatively bought ₹8,067.15 crore of Indian equities, while they sold ₹9,072.64 crore — resulting in an outflow of ₹1,005.49 crore on Tuesday. Meanwhile, DIIs infused ₹8,623.58 crore and offloaded ₹6,660.24 crore, registering an inflow of ₹1,963.34 crore.
‘’The decline in the dollar index to 105.95 and the US 10-year bond yield falling to 4.65 from the recent high of 4.88 are positive developments for equity markets. Even though FIIs continue to sell in India, the intensity of selling is coming down,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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Stock Market Today
Tracking positive global cues, India’s market sentiment improved today after US bond yields eased in the wake of the comments from Fed officials about interest rates. “Global stocks snapped higher on Tuesday, in line with a retreat in bond yields after Federal Reserve officials signalled the recent yield surge could justify caution on interest rates, while oil eased, but violence in the Middle East made for nervy trading,” said news agency Reuters.
Nifty 50 today closed at 19,689.85, up 178 points, or 0.91 per cent. The Sensex ended the day at 66,079.36, up 567 points, or 0.87 per cent. Mid and smallcaps outperformed the benchmarks. The BSE Midcap index rose 1.14 per cent while the BSE Smallcap index ended 1.26 per cent higher.
Also Read: Up over 3%, Nifty Midcap 150 outperforms all major indices in September; check details
“The Indian market completely recovered yesterday’s losses which was mainly due to the Hamas-Israel conflict. Moderation in crude prices and positive global cues on account of dovish remarks from Fed officials, which restrained US bond yields, aided the rebound. The domestic market’s primary focus is currently on the approaching result season, with optimistic expectations on earnings,” said Vinod Nair, Head of Research at Geojit Financial Services.
Where are markets headed?
Analysts noted that more importantly, the intensity of FII selling is decreasing on easing US bond yields and DIIs are increasing their purchases. The calibrated buying in small quantities in quality stocks in banking, automobiles, IT, capital goods and real estate/construction would be a good strategy for long-term investors, according to market experts.
“The uncertainty associated with the Israel- Hamas war continues. It can take a turn for the worse if Israel starts ground operations in Gaza. The possibility of easing of tensions also cannot be ruled out since Hamas will bargain with the captured Israeli hostages. Unlike economic and market trends, geopolitical developments cannot be predicted. This uncertainty will weigh on markets,” said Dr. V K Vijayakumar.
Also Read: TCS Q2 Results Preview: IT major to report muted earnings growth; share buyback in focus
Technical View
According to market analysts, the frontline indices mirrored the sharp rebound in world equities as short covering propelled the benchmark Sensex to close above the psychological 66,000 mark.
“Nifty remained robust throughout the day as the bulls regained control. On the hourly chart, the Nifty has broken out of an inverted head and shoulders pattern. In the short term, the index is expected to maintain its strength. A decisive move above 19,700 points could potentially propel the index towards the range of 19,850 to19,900. The support level is situated at 19,600,” said Rupak De, Senior Technical Analyst at LKP Securities.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 10 Oct 2023, 09:58 PM IST