New Delhi [India], May 16 (ANI): Stock indices began on a strong start at the opening bell Thursday, tracking firm overnight cues from US markets which rose after a softer-than-expected US consumer inflation in April.
In the 12 months through April, the CPI increased 3.4 per cent after climbing 3.5 per cent in March. The moderation in inflation likely raised expectations of sooner interest rate cuts in the US in 2024.
Soon-than-normal arrival of Southwest Monsoon, as predicted by IMD, offering relief to farmers after below average rainfall last year, also supported investor sentiments this morning. The southwest monsoon is likely to hit Kerala on May 31, a day before the normal date of June 1.
In 2023, rainfall over the country as a whole during monsoon season (June-September), was 94 per cent of its long-period average.
At 9.25 am today, Sensex was at 73,377.62 points, up 390.59 points or 0.54 per cent, and Nifty was at 22,316.90 points, up 116.35 points or 0.52 per cent. Barring Nifty pharma and Nifty healthcare index, which were a tad lower, rest were in the green, NSE data showed.
Nifty IT rose the most, primarily due to the moderation in inflation in the US, raising business prospects for Indian IT companies.
“IMD forecast of a normal monsoon arriving by May 31st in Kerala is a big boost to the positive domestic factors as well. We expect a positive start to Indian stocks today, what remains to be seen is if FIIs will rerate the Indian markets and flows will turn positive,” said financial market expert Ajay Bagga.
Going back to Wednesday, Indian benchmark indices deviated from their three-day winning streak and concluded in negative territory.
Over the last week, indices had slumped consistently, which analysts asserted was due to a strong US dollar, uncertainty in Lok Sabha elections outcome after a decreasing voter turnout trend seen so far in the phases that went to vote, and a profit booking after the recent rally.
Overseas investors remained net sellers of Indian equities for the ninth consecutive session on Tuesday. However, domestic institutional investors stayed net buyers for a fortnight now, making up for the outflows by the foreign investors.
Foreign portfolio investors (FPIs) have turned net sellers in Indian stocks lately. Foreign portfolio investors (FPIs), who continued to remain net buyers for the third month until mid-April, have cumulatively sold stocks worth Rs 8,671 crore during the month, National Securities Depository Limited (NSDL) showed. So far in May, they have sold stocks worth Rs 25,280 crore.
“India’s underperformance is likely to change soon with clarity on election results. DIIs, HNIs and retail can turn aggressive buyers lifting the market sharply. FIIs can’t afford to miss this potential rally. The only risk is political instability after elections which appears a very low probability event now,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. (ANI)
