While the expected decline by the Federal Reserve remains an overhang for the markets, investors expect policy normalization to go smoothly
Shares recovered sharply on Wednesday, reaching a three-week high as commodity prices fell and positive signals from global markets improved investor sentiment. Crude oil prices closed below $100 a barrel for the first time since February on Tuesday, after hitting a 14-year high on March 8. done smoothly. With the outbreak of new Covid cases in China, authorities have announced a new stimulus package, which also boosted sentiment.
Foreign portfolio investors (FPIs) became net buyers on Wednesday, after buying shares worth $40.91 million against the purchase of $101.29 million by domestic institutional investors, preliminary data on the exchanges shows.
Today’s move was a rapid rally followed by what happened overnight in the US after crude oil prices fell and widespread manufacturing data was weaker than expected. This eased fears of an aggressive rate hike by the Federal Reserve. A strong recovery in the Chinese market also stimulated sentiment. Given the global situation and uncertainty, the policy normalization will be carried out in a smooth and calibrated manner, and we can expect a 25 basis point (bps) increase with a wait-and-see commentary,” Aishvarya Dadheech, fund manager, Ambit Asset Management, told FE.
The Sensex closed higher at 1,039.80 points or 1.9% at 56,816.65 – with 28 of its constituents finishing green. The broader Nifty-50 finished 312.35 points or 1.9% higher at 16,975.35 – the highest level in 14 trading sessions. Broader markets also rose in line with benchmark indices. The BSE mid-cap and small cap closed 1.8% and 1.5% higher, respectively. Easing oil prices also strengthened the rupee. On Wednesday, the local currency jumped 41 paise against the greenback, finishing at 76.21.
Markets in other Asian countries also closed sharply higher, with shares in China leading the region after announcing the rollout of stimulus measures amid a rise in Covid-19 cases. The Shanghai Composite finished up 3.5%, while Hang Seng and Nikkei 225 gained 9.1% and 1.6% respectively. “Global markets were positive after the Chinese government announced stimulus measures to boost the economy after the outbreak of new corona cases. The Nifty is slightly below 17,000 and is now above the 200 DEMA and also the 16,800 resistance zone. Even the India VIX has cooled significantly to 24.12 from 33.97, supporting bullish sentiments. Markets would now closely monitor the outcome of the US Fed meeting, which would give direction to global interest rates,” said Siddhartha Khemka, chief of retail research at Motilal Oswal Financial Services.
All sector indices on the BSE ended in green, with real estate and metals rising the most. While the BSE Realty added 3.7%, Metals and Oil & Gas were up 2.6% and 2.2% respectively.
This post FPIs Drive Net Buyers: Sensex Up 1,040 Points As Bulls Return was original published at “https://www.financialexpress.com/market/fpis-turn-net-buyers-sensex-soars-1040-points-as-bulls-return/2463496/”