In the midst of a truncated trading week, Bharat stock indices started off on a positive note this Monday. The benchmark Sensex and Nifty were both up by 0.6%, with Sensex at 71,107.46 (up 407 points) and Nifty at 21,475.90 (up 123 points) at the opening bell. This comes after a challenging Tuesday when the stock markets experienced a significant drop of over 1,000 points, attributed to factors like high valuations, foreign portfolio investors withdrawing funds, and mild profit booking.
Upcoming Events: Finance Minister’s Budget and US Federal Reserve Meeting
Domestic investors are now gearing up for a busy week ahead, closely monitoring Finance Minister Nirmala Sitharaman’s budget proposals and other macro-economic guidance scheduled for Thursday. Simultaneously, the outcome of the US Federal Reserve’s first policy meeting of 2024, set for Wednesday, is also under investors’ scrutiny. Chief Investment Strategist at Geojit Financial Services, VK Vijayakumar, notes that while these events are significant, their impact on the market may not be substantial. The budget is expected to be a vote on account without major market-altering announcements, and no rate cut is anticipated in the Fed decision, but the commentary will be closely watched.
Foreign Portfolio Investors Turn Net Sellers in January
A notable trend in January 2024 is the aggressive selling of Indian stocks by foreign portfolio investors (FPIs). The National Securities Depository Limited (NSDL) data reveals FPIs sold Indian stocks worth Rs 24,734 crore in January after being net buyers in the preceding months of November and December. In December alone, FPIs displayed strong interest in the Indian equity market, accumulating stocks worth Rs 66,135 crore. Analysts suggest that the recent bout of selling in the cash market can be linked to rising bond yields in the US, raising concerns among investors.
Sector-wise FPI Transactions
FPIs have shown diverse preferences in their transactions. They were sellers in autos, auto ancillary, media, and entertainment, and marginally in IT sectors. However, they actively bought in oil and gas, power, and selectively in financial services. Analysts attribute the shift in investment patterns to concerns surrounding rising bond yields in the US, influencing recent selling trends in the cash market.
As the week unfolds, market participants are anticipating further developments and adjusting their strategies based on the outcomes of the Finance Minister’s budget proposals and the US Federal Reserve’s policy meeting.
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