Financials, technology, and consumer stocks led Wednesday’s gains even as softer US economic data – weaker-than-expected factory output and job openings – and the bankruptcy filing by Virgin Orbit halted the four-day winning streak on Wall Street.
The Sensex inched closer to the 60,000 mark while the Nifty surpassed the crucial psychological level of 17,500. At the close of Wednesday’s trade, the Sensex ended at 59,689.31, up 582.87 points or 0.99% from Monday’s close. The Nifty surged 159 points, or 0.91%, to end at 17,557.05.
India’s banks, stocks, and money markets were closed Tuesday for Mahavir Jayanti.
“Markets are back to the ‘risk-on’ and we will have to live through these phases of volatility,” said Mayuresh Joshi, head equity research, William O’Neil India. “It appears the turmoil in the US banking system has been resolved but we will have to keep looking over our shoulders if there’s any contagion effect.”
Joshi said the underlying Indian and global macroeconomic situation remains soft and shaky, and investors will need proof that the rally will be sustainable beyond the fourth quarter earnings.
The RBI, in its policy announcement on Thursday, is expected to deliver a 25 basis point hike in interest rates but its commentary will be crucial given the growing risks of El Nino and sticky inflation globally, especially to rural consumption, Joshi said.Foreign portfolio investors (FPIs) on Wednesday were net buyers in the cash segment worth ₹806.82 crore while domestic institutions sold shares worth ₹947.21 crore, according to provisional stock exchange data.
“Lately, we have seen foreign investors holding the markets,” said Abhilash Paagria, head, alternative and quantitative research, Nuvama Institutional Equities.
