Indian benchmarks Sensex and Nifty ended their three-session losing run on Friday, buoyed by a strong showing in heavyweight stocks.
The Sensex gained 480.57 points, or 0.74%, to close at 65,721.25. It had risen up to 558.59 points, or 0.85%, in intra-day trade. Similarly, the broader Nifty advanced up to 157.20 points intra-day, before settling at 19,517, up 135.35 points, or 0.7%, from Thursday.
Since July 21, the markets have witnessed an interesting reversal in trends with respect to FII (foreign institutional investor) and DII (domestic institutional investor) flows. FIIs, which had pumped in a net Rs 21,308 crore during the month up to July 20, have since withdrawn a net Rs 8,619 crore (up to August 4). In these 11 sessions, foreign investors were net buyers on only two days, according to provisional data from the exchanges.
Showing a reverse trend, DIIs have bought to the tune of Rs 12,142 crore since July 21, also being net sellers on only two occasions. Up to July 20, domestic investors were net sellers of up to Rs 11,710 crore.
“Owing to challenges with the currency and rising US bond yields, this seems to be a risk-off trade by FIIs. This FII selling has also opened an opportunity for DIIs to buy, which they have been doing,” said Naveen Kulkarni, CIO of Axis Securities.
While Fitch’s US downgrade has sent jitters across indices globally, market players have said it is unlikely to impact FII flows to India, as these are more influenced by movement in currency and the US bond yield.
For the week, the 30-share Sensex fell 438.95 points (0.66%), while the Nifty shed 129.05 points (0.66%). This was the second consecutive weekly decline recorded by the indices, after five consecutive weeks of net gains.
“The week began on a positive note, with hopes of an end to the policy tightening era due to cooling inflation worldwide. However, negative news about the US rating downgrade, weak factory activity data from the euro zone and China, and prolonged FII selling triggered by rising US bond yields caused widespread worries. Increased concerns over the US economy forced investors to flee in search of safe haven investments, leading to a surge in the dollar index,” said Vinod Nair, Head of Research at Geojit Financial Services.
IndusInd Bank led gains among the Sensex pack, rising 3.22%, followed by Tech Mahindra (2.91%), Wipro (2.28%), and Airtel (2.10%). On the other hand, SBI was the top loser — sliding 2.94%. The public sector lender’s market capitalisation took a Rs 15,484-crore dip to Rs 5.11 trillion.
“The domestic market recovered from the impact of weak global cues, gaining support from positive domestic earnings led by IT and Pharma,” added Nair.
Investor wealth recovered by Rs 1.87 trillion on Friday to Rs 304.16 trillion. A total of 2,196 stocks advanced on the BSE, while 1,384 declined.
Sectorally, the Bank Nifty jumped 366.05 points (0.82%) to 44,879.50, while the Bankex rose 330.09 points (0.66%) to 50,428.55. Information Technology, Teck, and Telecommunications were the top sectoral gainers on the BSE, while Auto, Power, and Utilities were the top laggards.
Among Asia-Pacific peers, the Nikkei, Shanghai Composite, Hang Seng, and ASX200 all closed in the green, while the KOSPI declined.