Benchmark indices rose for a fourth straight trading session on Tuesday, supported by positive global cues and buying by foreign portfolio investors (FPIs). The Sensex ended above the 61,000 mark for the first time since January 17, 2022 — at 61,121 — with a gain of 375 points, or 0.6 per cent. It has posted gains in 11 of the past 12 trading sessions, and is only about 1 per cent shy of hitting a new lifetime high. In the past 12 sessions, the index has added 3,886 points, a gain of nearly 7 per cent.
The broader Nifty50 closed at 18,145, up 133 points, or 0.7 per cent. Robust manufacturing data also boosted sentiment.
FPIs continued to be strong buyers of Indian equities. On Tuesday, they bought shares worth Rs 2,610 crore, according to the provisional data from exchanges. Optimism that the days of aggressive monetary policy are coming to an end, and optimism surrounding the resilience of the US economy is aiding the FPI flows to India, according to experts.
The gross domestic product (GDP) data released last week showed that the US economy rebounded in the July- September period following two quarterly contractions. The US GDP rose at a 2.6 per cent annualised rate in the July to September quarter.
Crude prices falling below $100 a barrel was also seen favouring the domestic economy, which relies heavily on oil imports.
The S&P Global India Manufacturing Purchasing Managers Index (PMI) rose to 55.3 in October from 55.1 points in September, on the back of expansion in factory orders and production. Analysts termed the PMI figures as another proof of demand, despite the global economic distress.
“The bulls are driving the trend in the domestic market with backing from FPIs and the global markets. The PMI numbers show that manufacturing activity in India remained strong in October and that pricing pressures were kept in check as new orders and production increased, albeit slowly,” said Vinod Nair, head of research, at Geojit Financial Services.
The GST in October, collected for September, stood at Rs 1,51,718 crore, the second-highest ever. India’s monthly GST revenue remained above Rs 1.4 trillion for the eighth month in a row since March.
Despite the renewed optimism, investors are wary about central banks continuing a more hawkish stance going ahead, as taming inflation continues to be a challenge globally. The Eurozone inflation surged to a fresh all-time high with consumer prices rising by 10.7 per cent from a year ago in October.
Going forward the monetary policy decision by the Fed and a few other central banks are likely to provide clues for the market’s trajectory.
Investors will also be keenly tracking US non-farm payrolls, and the unemployment data, which will be released this week. The RBI has scheduled an emergency meeting after it failed to contain inflation for three consecutive quarters.
“Nifty has reclaimed the 18,100-plus zone after almost seven months, and it is likely to continue this tone; however, we can’t ignore the possibility of an intermediate pause or dip. Besides, the upcoming events will keep the volatility high. Participants should maintain the buy-on-dips approach and stick with the sectors that are participating in the move,” said Ajit Mishra, vice-president of research, Religare.