India’s benchmark stock index Nifty touched the 18,000-mark on Monday as foreign portfolio investors (FPIs) stepped up their buying in the cash segment on the back of a five-day rally in the US markets last week. Provisional data showed that FPIs made net purchases worth ₹4,178 crore in the cash market, which is their largest single-day buying during the month.
In the derivatives segment, the FPIs have covered all their short positions in the index futures segment, indicating that they were caught on the wrong foot during the recent 1,000-point rally of Nifty this month, experts said. The Nifty index closed 18,012 with gains of 225 points or 1.27 per cent. The Sensex closed at 60,746 with gains of 786 points or 1.31 per cent.
“The buoyancy in global markets, especially the US, combined with favourable domestic cues is helping Indian markets. We expect the Nifty to regain momentum above the 18,100-level. In line with the trend, participants should look for buying opportunities on every dip and avoid contrarian trades,” said Ajit Mishra, VP - Research, Religare Broking.
There has been too much pessimism in markets due to the impending rate hike by the US Federal Reserve, Russia-Ukraine conflict, inflation but all that seems to have been factored in so far, experts said. Large traders and investors will be eyeing the Fed meeting later this week, which will give cues for further market moves. While Fed chief Jerome Powell is expected to hike the interest rates by 75 bps, his commentary about the future course of rate hikes will drive the markets. Global crude oil prices have cooled off in the past few weeks, which has kept the inflation under check.
“The Nifty could now attempt to test the recent intermediate high of 18,096. Once these levels are crossed, the Nifty looks set to move higher towards the previous intermediate highs of 18,351. The index could witness a mild correction in the very near term. It is important that the Nifty holds above the immediate support of 17,899-17,723 for the uptrend to continue,” said Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities.