The benchmark Sensex and Nifty kicked off the trading day on February 19 with gains, driven primarily by strong performances in the pharmaceutical and energy sectors. At 09.20 am, the Sensex surged by 90.34 points or 0.12 percent, reaching 72,517, while the Nifty saw an increase of 51.70 points or 0.23 percent, reaching 22,092.
In morning trading, approximately 2,156 shares advanced, 671 declined, and 112 remained unchanged. The positive momentum extended to the broader market as well, with the BSE midcap and smallcap indices rising by 0.5 percent and 0.8 percent, respectively.
Sectoral Performance and Market Analysis
Among the sectors, Nifty Pharma saw the most significant gain, rising nearly a percent, followed by Nifty Energy, which posted a 0.7 percent increase. However, Nifty IT experienced a slight decline of half a percent. Nevertheless, all other NSE sectoral indices were trading higher, contributing to the overall positive sentiment in the market.
Foreign Portfolio Investors (FPIs) and Market Trends
The spike in US bond yields resulting from higher-than-expected consumer price inflation prompted sustained selling by foreign portfolio investors (FPIs) in the cash market. Until February 16, FPIs had sold equity worth Rs 6,112 crore. However, buying through “the primary market and others” reduced the net sell figure to Rs 3,775 crore.
In 2024 so far, FPI selling has amounted to Rs 29,519 crore. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, this trend of FPI selling is expected to continue as long as US bond yields remain elevated.
On the other hand, FPIs have been consistently buying debt since the beginning of the year. In February alone, FPIs purchased debt securities worth Rs 16,559 crore, bringing the total for 2024 to Rs 36,395 crore. This trend is anticipated to persist in the foreseeable future.
Expert Analysis and Technical View
Santosh Meena, Head of Research at Swastika Investmart Ltd., provided a technical view of the market. He noted that the Nifty displayed signs of a bullish breakout from a cup and handle formation, with a crucial resistance level at 22,125. Meena anticipated further upward movement towards levels of 22,350/22,500 upon surpassing this barrier. For Bank Nifty, he identified a double bottom formation with resistance at 46,800–47,000, suggesting that breaching this level could trigger short covering towards 48,000. On the downside, support zones were identified at 45,700–45,400.
In conclusion, the Bharatiya stock market opened on a positive note on February 19, buoyed by gains in the pharmaceutical and energy sectors. However, concerns regarding US bond yields led to continued selling by FPIs in the equity market, while their interest in debt securities remained strong. Expert analysis suggests a bullish outlook, with technical indicators pointing towards further upward movement in key indices, albeit with some resistance levels to overcome. Investors are advised to exercise caution and seek professional advice before making any investment decisions.
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