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Foreign portfolio investors (FPIs) were buyers in the cash segment of the stock markets for the third consecutive day even as the inflation numbers reported on Monday were below expectations. The Sensex and Nifty rose nearly 1 per cent. The Sensex gained 600 points or 0.99 per cent to close at 61,032. The Nifty index gained 158 points or 0.89 per cent to close at 17,929.
FPIs stood to be net buyers of equities worth ₹1,305 crore. Before February 10, the FPIs were net sellers in cash equities for six consecutive sessions after the Budget and all the trading days from January 20 to January 31.
Mixed show by Adanis
Share price of Adani Enterprises managed to gain 1.91 per cent to close at ₹1,750. Adani Ports and SEZ rose 2.15 per cent to close at ₹565. Adani Power was still locked in a lower circuit as the share fell 5 per cent to close at ₹148.
Among other Adani stocks, Adani Total Gas, Adani Green and Adani Transmission were still locked in a lower circuit, down 5 per cent. Among the two cement companies in the group’s portfolio, Ambuja Cement fell 1.68 per cent and ACC was up marginally by 0.41 per cent.
In the India Strategy report released by BNP Paribas, analyst Kunal Vora, Head - India Equity Research, maintained a cautious view on the country’s stock markets as he believed that valuations remained high. “We expect pressure on foreign flows amid Fed (US Federal Reserve) tightening and China reopening, and on local flows from rising term deposit rates. We see a high level of earnings and margin optimism and expensive valuation as indicated by the elevated gap between bond yield and earnings yield,” Vora said.
BNP’s take
However, the BNP report also said that some investors believed that the elevated valuation could sustain on strong local flows. This statement gels with the fact that when FPIs were on a selling spree in 2022, domestic mutual funds and insurance companies were supporting the markets, making Sensex and Nifty the most resilient to international negative sentiment.
A note reviewed by businessline showed that market regulator SEBI informed the Supreme Court that there was no systemic risk to the markets despite the recent volatility and a rout, mainly the Adani Group companies.
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